The Nigerian Breweries have fingered the Naira redesign policy of the Central Bank of Nigeria (CBN) having lost about N10.71bn in the first quarter (Q1) of 2023.
Recall that the Naira redesign policy, led by
Godwin Emefiele, the CBN governor, was implemented on February 10, 2023, to
reduce the currency in circulation.
The implementation led to the CBN phasing out
the old N200, N500 and N1,000 notes. They were replaced with newly redesigned
banknotes, however, the apex bank printed insufficient currencies, resulting in
Naira scarcity.
The cash crunch led to many depending on
digital channels of payment, however, the electronic payment platforms of
commercial banks crashed on several occasions, as the payment channels couldn’t
withstand the sudden migration and traffic.
Consequently, State governors filed a lawsuit
against the Federal Government to force the CBN to suspend the policy. The
Supreme Court ruled on March 3, stating that the policy infringed on the rights
of Nigerians and the old Naira notes remained legal till December 31, 2023.
However, the ruling of the Supreme Court
couldn’t prevent Nigerian Breweries from bearing the brunt of the policy, as it
had already caused much damage to the company’s sales.
According to the financial records for Q1
released on Wednesday, Nigerian Breweries suffered a -10.49 per cent drop in
revenue. The firm generated N123.31 billion in turnover for the quarter. This
is below the N137.77 billion posted in Q1 2022.
Also, gross profit fell to N43.88 billion in
the review period, from N62.45 billion recorded in the first quarter of last year,
indicating a –29.7 per cent decline.
This led to Nigerian Breweries suffering
N10.71 billion loss between January to March this year. The company failed to
replicate the N13.61 billion profit after tax recorded during the same period
in 2022.
Commenting on the disappointing turnover to
Ripples Nigeria, the Nigerian Breweries board said: “The operating environment
during the period under review was very challenging for businesses.
“The impact of the cash crunch which led to a
near collapse of payment channels as well as the security and safety
uncertainties associated with the general elections, created disruptions in the
economy.
“These were in addition to the continuing
headwinds of inflationary pressure with its impact on purchasing power, input
cost, and operating expenses.
“The total brewed product market suffered a
double-digit (mid-twenties) volume decline versus the same period in 2022. We
were able to largely mitigate the volume decline impact on our Revenue due to
our appropriate pricing strategy.
“Our Operating Profit was further impacted by
a one-off reorganisation cost with a view to refreshing and restructuring the
business to cope with current challenges for a sustainable future.”
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