Nigerian Breweries gets approval to raise 600bn capital
By Oluwaseyi Lawal
The shareholders of Nigerian Breweries Plc, in their recent 78th Annual General Meeting of the company held at the Muson Centre, Shell Hall, Onikan, Lagos on Friday, 26 April, 2024, have unanimously agreed to a capital raising initiative of N600 billion through a rights issue.
This move allows the company to restructure its capital, offering existing shareholders the chance to purchase additional shares at a price set by the Board, considering market conditions. Siep Hiemstra, the Interim Chairman, stated that this decision aligns with the company’s goal of enhancing its financial standing, restoring profitability, and delivering value to its shareholders.
The intended purpose of this capital infusion is to settle outstanding foreign exchange payables and a portion of local bank facilities, thereby mitigating risks associated with currency devaluation and reducing interest expenses. Additionally, Heineken, the majority shareholder, has expressed willingness to support the recapitalization by subscribing to its allotted shares.
Mr Hiemstra said “Following the challenging year 2023, and the present volatility of the Nigerian business environment, we are focused on our strategic recovery plan backed by parent company Heineken, prioritising efficiency and agility in all areas of operations; and maintaining market leadership through its rich portfolio of brands. We will continue to demonstrate resilience to deliver value for shareholders and all stakeholders”.
Several shareholders voiced their support for the recapitalization initiative during the meeting, acknowledging its potential to positively influence the company’s business expansion and performance.
Boniface Okezie, the National Coordinator of the Progressive Shareholders Association of Nigeria, commended the company for its recovery strategy, emphasizing the opportune timing for such a bold action to enhance performance significantly. He expressed gratitude to the board and management for their exemplary leadership, which has bolstered the company’s resilience in challenging times.
He said “We believe in the leadership of Nigerian Breweries and we are certain that soon enough,we will reap the benefits of these bold decisions.”
During his address, Hans Essaadi, the Managing Director/CEO of Nigerian Breweries Plc, expressed appreciation to the shareholders for their backing, reaffirming the company’s dedication to providing sustained growth to its shareholders, notwithstanding the prevailing economic difficulties and obstacles.
“While we cannot influence the external environment, we are committed to maintaining resilience in the face of adversity. We are confident that the company will remain in a good position to weather the storm. We will sustain a strong cost management culture; optimize our operational footprint;and leverage our strong brand portfolio, exciting innovations and route to consumers to win in the market” Mr Essaadi said.
An analysis of the audited financials for the 2023 fiscal year indicates a 9% increase in revenue compared to the previous year, while operating profit decreased by 15% from N53 billion in 2022 to N45 billion in 2023. This decline was attributed to elevated input costs and one-time reorganization expenses, despite robust cost-saving initiatives and efficiency measures.
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