How N153bn Forex Loss Slashes Nigerian Breweries’ Capital Base To Lowest In Years

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Struggling from the foreign exchange loss of N26 billion in 2022, another net foreign exchange loss of over N153 billion in 2023 spurred a huge loss of over N106 billion for Nigerian Breweries Plc.

The loss consumed the company’s retained earnings of close to N91 billion in 2022 and slashed equity capital from almost N180 billion in the preceding year to N63 billion at the end of 2023 – the lowest equity base the company has seen in many years.

The audited accounts of the brewing company for the full year ended December 2023 show that operating pressure combined with foreign exchange losses kept the bottom line in the red from the first to the final quarters of the year.

A lot of operating pressure came from increased production costs and was reinforced by the cost of finance to eat up revenue and squeeze margins.  The pressures worsened for the company in the final quarter – which accounts for over N49 billion or 46.4 per cent of the full year’s loss. The final quarter contributed N19.5 billion of the net foreign exchange loss, topping up the third quarter closing figure of N86.8 billion to the full year figure of over N106 billion.


Heightened pressure from production costs presented a fundamental constraint to the company in 2023. Increased production cost consumed more than all the gains in sales revenue in the year. While the company’s turnover grew by N49 billion to N599.6 billion in the year, the cost of production rose by roughly N50 billion to close at N387 billion.


This created a major cost-income imbalance in which the gains in sales revenue failed to cover the additional cost incurred to produce the naira of the company’s products sold.

The imbalance resulted in a decline in gross profit – which went down slightly from N213 billion to N212.6 billion during the year and was worsened by the increased cost of finance which added further to the constraint of the hike in the production cost.


Finance expenses multiplied more than four times in the year to close to more than N36 billion in the full year, reflecting the company’s enlarged borrowings. The company piled up debts in the year, amounting to about N342 billion, close to three times the N122 billion closing debt figure in 2022.

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Further operating constraints were recorded from other income – which declined slightly at N2.9 billion as well as increases in selling/distribution and administrative expenses – that increased in the face of revenue constraints.


The combination of increased costs and revenue constraints led to a drop in operating profit from about N52 billion in 2022 to less than N44 billion at the end of 2023.


The foreign exchange losses with finance expenses added up to a huge net finance cost of over N189 billion, an upsurge from a net finance cost of N34.4 billion in 2022.

Net finance cost consumed the operating profit of N44 billion and created a pre-tax loss of over N145 billion for the year. This is a deep plunge from a pre-tax profit of more than N17 billion the company posted in 2022.

The loss was reduced by a tax credit of roughly N39 billion, leaving a net loss of N106.3 billion for the full year. This is down from an after-tax profit of over N13 billion the company generated in the preceding year.

The loss for the year could not be absorbed by the company’s capital account as it wiped off retained earnings of N91.9 billion and created a retained deficit of over N26 billion at the end of the year.


The company’s capital stock has therefore dropped from N180.9 billion in 2022 to a little over N63 billion at the end of 2023. The capital base of the brewing company has never been this low for many years.

Foreign exchange losses have been the headache of Nigerian Breweries since the third quarter of 2022 and have caused its losses from quarter to quarter.