Nigerian Breweries 3 Months Unaudited 2017 Financial Summary

3 Months Report NIGERIAN BREWERIES PLC
	2017 N'000	2016 N'000	change	Year End
Revenue	91,288,698	77,554,948	18%	December
Profit/Loss before taxation	17,439,175	15,007,529	16%
Profit/Loss for the period	11,449,252	10,454,510	10%
Issued Shares (Units)	7,929,100,888	7,929,100,888
Basic Earnings Per Shares (Kobo)	144.00	132.00	9%
Last total dividend paid (Kobo)	0.00	0.00

Nigerian Breweries released its first quarter report for 2017 today 20th April 2017 after the close of  trading session. The Stock closed on the floor of the Exchange at #124.00 which we presumed was a reaction to the result expectation.

The table above gave a summary of major line items of the result. However a closer look at the result revealed the following:

Marketing and distribution expenses increased relative to the increase in revenue by 18.71%. The company was able to cut administrative expenses by 9.09% which you would agree with us was remarkable. 

In addition to its cost cutting approach was Net finance cost that declined from 41.38% which was driven by lower interest expense and lower exchange rate losses. With relative stability returning to the Forex market, we belief NB should have a good year. Because its worst quarter in 2016 coincided with the period the Naira was devalued and the company made a loss of #7.5billion combined with other factors.

A further analysis of the Asset and Liability of NB, we discovered that Loans and borrowing declined by 64.71% and this was as a result of repayment of #11billion within the quarter as stated  in its cash flow statement. 

Bank overdraft grew by  320.92% the company can do better by ensuring its trade receivables that increased by 35.18% which translated to about #6.9billion would more than negate the necessity of the overdraft.

We also noted that depreciation increased by 66.67% although there was also an investment  #5.9billion in property, plant, and equipment within the period.

Nigerian Breweries had started well, with the possibility of Nigeria Economy Growing, from the reports of IMF and World Bank, in addition to the recovery plans put in place by the Government, we expect NB to keep its head above water in the next two quarters and hit an home run in Q4. 

Worthy of note is the cash for script by the company which will bring about a dilutive effect on the earnings per share, depending on the number of shareholders that buys the idea. The size of which we can not determine now until maybe after the Q2 result is made public.

Above all, we expect Nigerian Breweries and the Brewery sector to enjoy a good year.