Despite Six Years Of Unprofitability, International Breweries Spends N71bn On ‘Other Expenses’

HRM. Igwe Nnaemeka A. Achebe and International Breweries Plc Logo

… Directors Optimistic Company Will Not Shutdown

The directors of International Breweries Plc are still hopeful that the company will not cease operation after 2023 despite sustaining losses for six consecutive years.

International Breweries’ financial reports for 2018, 2019, 2020, 2021, 2022, and 2023 showed that the company which makes Trophy Lager, Hero Larger, Grand Malt and Eagle Stout did not make a profit during the period, the company’s books analysed by THE WHISTLER reveal.

The company’s losing streak continued in the 2023 full year when it reported a loss after tax of N59.46bn up from N21.6bn it lost in 2022. The beer maker reported a pre-tax loss of N87.64bn.

The books reveal that revenues from sales improved from N218.65bn recorded in 2022 to N264.27bn in 2023.

The books showed that the company spent N71.39bn on “other expenses”, an expenditure that rose by 413.8 per cent or N57.5bn from the N13.89bn spent on the same expenditure in 2022.

A breakdown of the “other expenses” shows that the company’s realised net foreign exchange loss rose from N8.36bn to N14.8bn recorded in 2022.

The net foreign exchange loss unrealised was N57.59bn, a rise from N5.1bn posted in 2022.

The expenditure weighed high on the company’s profitability and contributed largely to the loss recorded in 2023.

The company cut its administrative, marketing and promotion expenses from N51bn in 2022 to N49.78bn in 2023.

“The directors have no doubt that the company will be in existence after 12 months from the reporting date. The directors do not intend to cease operations or stop any of the production lines,” the directors of the company said on the company being a going concern.

The company’s financials for the six years showed that in 2018, International Breweries made a pre-tax loss of N8.1bn and a profit after tax of N3.64bn. The last time the company made profit was in 2017 when it made N1.39bn profit after tax.

The company continued its loss in 2019, posting N36.16bn as pretax profit and N27.79bn as profit after tax. Revenue for 2019 was N132.35bn.

The company recorded marginal improvement in revenue in 2020 at N136.79bn but recorded a pre-tax loss of N28.59bn. In the same year, its books showed that the company made a loss after tax of N16.08bn.

In 2021, International Breweries reported N182.29bn revenue but recorded loss before tax of N19.8bn and a loss after tax of N17.65bn.

Despite efforts to return the company to profitability, the company sank into a loss before tax of N26.84bn and a loss after tax of N21.6bn. During the year, its revenue grew to 218.6bn.

International Breweries has recorded a cumulative loss after tax of N146.5bn from 2018 to 2023.

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