This decline in performance can be attributed to several factors, including soaring inflation, fluctuations in exchange rates, and rising input costs.
The company noted, "The rise in Net Loss was largely driven by foreign exchange losses resulting from the Naira's devaluation and elevated borrowing costs due to increased interest rates," in a separate statement.
Net revenue increased by 76.9 percent, reaching N710.9 billion. However, the cost of sales more than doubled to N500.1 billion, with 40 percent of input costs sourced from imports, making the company particularly susceptible to exchange rate fluctuations.
Selling and distribution expenses rose to N143.1 billion, up from N101.6 billion the previous year, with distribution costs surging by 63.2 percent.
Following the monetary authority's decision to devalue the Naira by 31 percent in January, the beverage company faced a net loss of N160.5 billion from foreign exchange transactions, compared to N86.8 billion the year before.
Pre-tax losses increased by 159.7 percent to N203 billion, while after-tax losses rose to N149.5 billion from N57.2 billion.
The local subsidiary of Netherlands-based Heineken NV indicated last month, in response to a PREMIUM TIMES inquiry, that it was relying on its parent company to fully subscribe to its recent rights issue.
The funds raised from this share offering, which aimed to secure N600 billion in new capital from existing shareholders, are intended to address overdue foreign currency obligations that had pushed shareholders' equity into negative territory by mid-year, as stated by Nigerian Breweries at that time.
The rights issue will enable the company to enhance its balance sheet and significantly mitigate foreign exchange exposure. This initiative is a component of the business recovery strategy designed to expedite the restoration of the company’s profitability, as stated by the brewer.
The financial situation has worsened in the quarter ending September, with shareholders’ equity increasing more than fourfold to -N84.5 billion from -N19.5 billion just three months prior.
Nigerian Breweries’ stock has declined by over 22 percent this year, lagging behind the Nigerian Exchange’s Consumer Goods Index, which has seen a return of more than 40 percent.
This year, the manufacturer of well-known beverage brands such as Gulder, Star Lager, Martina, Amsterdam Malta, and Fayrouz acquired a majority interest in Distell Wines and Spirits Nigeria Limited, thereby expanding its product portfolio to include spirits, wines, and flavored liquors.