International Breweries Plc, released its 2023 full year unaudited results. The report showed a higher loss per share of N1.26 in fourth quarter of 2023 against loss per share of N0.84 in fourth quarter of 2022, translating to a loss per share of N2.21 in 2023 full year against loss per share of N0.81 in 2022 full year.

The poor performance in the period resulted from the combined impact of increased FX loss and a jump in net finance costs .

In the fourth quarter, revenue expanded by 38.3%, with the notable increase attributed to price hikes, especially in the Malt and Lager segments.

Additionally, they highlighted that Trophy’s market leadership in the Lager segment contributed to the robust revenue growth.

On a quarterto quarter basis, revenue increased by 19.0%, benefitting from higher prices and festive-induced consumption.

Gross margin expanded significantly by 697bps to 17.9% in fourth quarter of 2023, supported by strong revenue growth amid the rise in the cost of sales.

The elevated costs are primarily due to higher energy prices, foreign exchange  illiquidity constraints, commodity cost headwinds, and inflationary pressures.

For context, International Breweries recorded a 24.1% increase in raw materials consumed and allocated overheads.

International Breweries reported an operating loss of N35.84 billion in fourth quarter of 2023 against operating loss of N22.99 billion in fourth quarter of 2022, driven by a substantial 234.2% increase in FX loss to N33.60 billion against N10.05 against billion in 2022.

Net finance costs increased significantly, following higher finance costs arising from interest on borrowings, alongside a 50.1% decline in investment income.

The increase in interest expenses is attributed to the brewer’s heightened reliance on loans and borrowings during the period, notably, with loans and borrowings surging to N376.09 billion in 2023 full year compared to N194.08 billion in 2022.

the pre-tax loss increased to N44.14 billion against pre-tax loss of N24.19 billion.

Consequently, the loss after tax settled at N33.80 billion in foutth quarter of 2023 against N22.66 billion in 2022, following a tax credit of N10.34 billion.

Despite the impressive topline growth, the brewer’s performance in the period was significantly impacted by high finance costs and foreign exchange illiquidity.

While analyst anticipate sustained revenue growth from modest price increases, the brewer still faces a grim profitability outlook driven by ongoing challenges with high financial leverage.

As a result, they anticipate a strain on profitability due to higher debt servicing costs and lingering foreign exchange issues.