Insecurity across the North now hitting companies relying on agro products
Strong indications have emerged showing that the observed drops in corporate performance of leading conglomerates have been linked to rising banditry and momentary attacks on parts of the agrarian Northern Nigeria that produce their raw materials.
Most hit in this endless crisis seems to be the brewery sub-sector who rely on supplies of barley, sorghum, maize, rice, and wheat from Nigeria’s middle-belt region which has been under serial pressure of herders farmers clashes and recently banditry.
Accordingly, shares of many breweries on the trading floor of the Nigerian Stock Exchange (NSE), are facing stagnation due to lull in turnovers rising from stagnating production within the period of the endless insecurity challenges.
For example, from a high of N146 in 2016, the Nigerian Breweries Plc stock price has continued downward slide till date.
Investigations show that the brewing giant had been experiencing lower sales and declining bottom line, as it posted a profit after tax of ₦8.23 billion for the half year (H1) ended 30th June 2018, a 33 per cent decrease compared to profit of ₦12.32 billion recorded in H1 2017, while earnings per share of 103 kobo for the period ended June 2018, against earnings of 154 kobo reported for the comparative period in 2017.
The drop in performance is further observed when the group announced a profit after tax of N19.4 billion and revenue of N324.4 billion which is clearly lower than the N31.6 billion recorded in 2017, representing a 41 per cent decline, while revenue also dipped from the N344.5 billion recorded in 2017, a six per cent decline.
Business Hilights gathered that Nigeria Breweries seems to be facing the insecurity-induced business challenge with other in the sector including the International Breweries (IB) Plc, the Nigerian unit of Belgian brewer Anheuser-Busch InBev (AB InBev), as it recently reported ₦2.2billion in net loss for Q1 2018 ended March.
