Analysts Remain Optimistic About Nigerian Breweries’ Future Amid Rising FX Losses
Detailed Summary
Positive Revenue Growth Despite Losses:
Nigerian Breweries’ unaudited report for Q3 2024 indicates that despite substantial foreign exchange (FX) losses, the company saw significant revenue growth, rising 74.9% to reach N703 billion. However, due to the naira’s devaluation, FX losses surged to N160.48 billion, up 84.83% from N86.83 billion in the same period of 2023. Consequently, the company’s loss after tax grew 161.39% to N149.50 billion.
Analyst Insights on Future Prospects:
Market experts see potential for a rebound despite current financial pressures. Mike Eze, Managing Director at Crane Securities, attributes Nigerian Breweries’ positive revenue and gross profit growth to its strong fundamentals and resilience. Eze emphasizes that the company’s strategic focus and leadership will likely guide it back to profitability, as it continues to adapt to economic challenges.
Resilience in a Challenging Market:
Chibueze Ona from Francona Consulting commended the company’s management for navigating tough economic headwinds. He believes Nigerian Breweries is well-positioned to regain its stature on the Nigerian stock market, even as the ongoing devaluation impacts both local and foreign-dependent companies.
Strategic Financial Moves:
To address the FX losses, Nigerian Breweries recently announced a N599 billion rights issue, aimed at alleviating its foreign exchange burden. This move signals the company’s proactive approach to balance-sheet management amidst the currency volatility in Nigeria.
In summary, while the company faces a tough financial environment, analysts are optimistic that Nigerian Breweries’ proactive strategies and strong fundamentals may enable it to overcome current challenges and sustain growth in the long term.
Detailed Summary
Positive Revenue Growth Despite Losses:
Nigerian Breweries’ unaudited report for Q3 2024 indicates that despite substantial foreign exchange (FX) losses, the company saw significant revenue growth, rising 74.9% to reach N703 billion. However, due to the naira’s devaluation, FX losses surged to N160.48 billion, up 84.83% from N86.83 billion in the same period of 2023. Consequently, the company’s loss after tax grew 161.39% to N149.50 billion.
Analyst Insights on Future Prospects:
Market experts see potential for a rebound despite current financial pressures. Mike Eze, Managing Director at Crane Securities, attributes Nigerian Breweries’ positive revenue and gross profit growth to its strong fundamentals and resilience. Eze emphasizes that the company’s strategic focus and leadership will likely guide it back to profitability, as it continues to adapt to economic challenges.
Resilience in a Challenging Market:
Chibueze Ona from Francona Consulting commended the company’s management for navigating tough economic headwinds. He believes Nigerian Breweries is well-positioned to regain its stature on the Nigerian stock market, even as the ongoing devaluation impacts both local and foreign-dependent companies.
Strategic Financial Moves:
To address the FX losses, Nigerian Breweries recently announced a N599 billion rights issue, aimed at alleviating its foreign exchange burden. This move signals the company’s proactive approach to balance-sheet management amidst the currency volatility in Nigeria.
In summary, while the company faces a tough financial environment, analysts are optimistic that Nigerian Breweries’ proactive strategies and strong fundamentals may enable it to overcome current challenges and sustain growth in the long term.