- Naira Devaluation Puts Pressure on Costs, Says NB
The Nigerian Breweries Plc has said the devaluation of the naira and the nation’s inflation rate are putting pressure on its input costs amid a decline in consumers’ purchasing power.
The company’s Managing Director/Chief Executive Officer, Mr. Nicolaas Vervelde, who stated this on Tuesday at a media briefing in Lagos, however, described the Nigerian market’s fundamentals as positive.
He said the company had to increase prices last year to reduce the pressure on input costs, adding, “We continue to focus on reducing costs, and our drive for innovation is key.
“We are close to sourcing 50 per cent of our raw materials locally; we aim to get to 60 per cent before 2020.”
Vervelde said an analysis of the company’s audited results for 2016 showed that revenue rose by 6.7 per cent to N314bn from the N293bn it recorded in 2015.
He said, “When all factors are considered, our results have been positive and creditable over the years. Despite the deterioration in consumer purchasing power, our robust brand portfolio, which covers a broad spectrum of consumer needs, enabled us to protect revenue and profitability.
“The operating environment in 2016 was very challenging, especially from an input cost, foreign exchange and purchasing power perspectives. Our volume growth was in the mid-single digit region, coupled with the price increases that we implemented positively impacted our revenue growth.”
He said the company’s board had recommended a total dividend of N28.386bn for approval at the forthcoming Annual General Meeting slated for next month, in addition to an interim dividend of N7.9bn paid to shareholders last year.
According to Vervelde, the operating environment in 2017 is expected to be similar to 2016, but the company is confident that it is well positioned to adapt to the environment as required, and stay committed to delivering a good return on investment to shareholders.