Finance: Nigerian Breweries’ profit declines by 22% as the hike in beer price affects sales

The company’s revenue also dipped by 5% to N173 billion from N181 billion recorded in the first half of 2017.

The largest brewing company in the country, Nigerian Breweries Plc, has posted a 22% decline in profit for the half year of 2018.

The poor financial statement, the company said, was due to new excise duty rates for alcoholic beverages and tobacco introduced by the government in June.

According to the unaudited financial results posted on the Nigerian Stock Exchange website, the brewing company announced a profit after tax of N18 billion for the first half of 2018 over the N24 billion recorded in the corresponding period in 2017.

The company’s revenue also dipped by 5% to N173 billion from N181 billion recorded in the first half of 2017.

ALSO READ: Why Nigeria hiked tariffs on alcoholic drinks, tobacco

Here are other highlights of the report

- Operating activities declined by 20% to N32bn in the first half of 2018 from N39bn in the same period in 2017.

- Profit before tax dropped by 19%to N28 billion from N34 billion in 2017.

The company blamed the new excise duty regime and higher tariff rate of beer introduced by the Nigerian government in June 2018 as the factor responsible for the poor half-year financial report.

ALSO READ: PZ Cussons’ pretax profit dropped by 23%

New excise duty for alcoholic beverages

In March 2018, the Nigerian government introduced new excise duty rates for alcoholic beverages and tobacco to raise fiscal revenues and reduce health hazards associated with tobacco-related diseases and alcohol abuse.

More trouble lies ahead for companies producing alcoholic beverages and tobacco in the country as the hike in the tariff of those commodities will further increase in 2019 from the current 1.25 Cl to 1.50 Cl.

Also from Business Insider Sub-Sahara Africa:

• Here's everything you need to know about Nigeria Air

• Nigeria's Wema Bank made N1.5 billion profit in 6 months on the success of its digital bank, ALAT

• Presidential aspirant, Donald Duke, shares his plans on how to boost Nigeria’s economy

• Nigerian government raised tax revenue by 42%, here’s how much it generated in 6 months

• Twitter has started clamping down on fake followers, here's what you will notice

• You will be surprised at the 19 people Nigeria's Buhari follows on Twitter

• Here's why Nigeria is not in a hurry to sign the continental free trade agreement, according to finance minister Kemi Adeosun

• These 6 banks invested N155.45 billion into the sinking fund in 3 years

• Nigeria approves framework that will see a new price for data