Brewery Industry Raised Revenue To N780bn In 2021 –Report

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According to Afrinvest, Nigerian Brewery Sector Update 2021 report noted that Guinness recorded a revenue of 54 per cent which fully offset the 20.6 per cent y/y contraction in 2020. The company also reclaimed part of the market share lost in 2020 as improved sales strategy delivered 20.3 per cent market share compared to 17.8 per cent in 2020. Further checks on the financial results of Nigerian Breweries Plc and International Breweries Plc revealed that their revenues in 2021 rose by 29.7 per cent y/y and 33.3 per cent y/y respectively on the back of the brewers’ adjusted sales and marketing strategies to suit the dynamics of the “new normal”.

The report further revealed that the combined impact of exchange rate devaluation (official rate: down 8.0 per cent to N410.40/$1.00), high average inflation rate (2021: 17.0 per cent vs 2020: 13.2 per cent), logistic bottlenecks, and excise charge on beer (0.40 Kobo/cl), wines (N1.50/cl), and spirits (N2.00/cl) sustained the pressure on brewers’ cost of sales (COGS) and margins in 2021.
Industry’s COGS rose 33.3 per cent y/y to N527.6 billion, while COGS margin printed at 67.6 per cent – 80 basis points shy of 2020 level.

Nevertheless, industry pre-tax profit- International Breweries Plc rebounded to a near pre-pandemic level with a y/y growth of 636.1 per cent to print at N29.5 billion (2020: -N5.5 billion), led by Nigerian Breweries with 80.4 per cent share at N23.7 billion (2020: N11.6 billion).

Speaking on the outlook of the sector in 2022, Afrinvest said, they estimate industry revenue and pre-tax profit would grow by 12.3 per cent y/y and 59.7 per cent y/y respectively in the full year of 2022.

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