First Quarter profit fall at International Breweries as input costs rise

International Breweries Plc reported a profit decline of 18% for the first quarter of 2017/2018 financial year despite seeing a record 37% surge in sales to N9.4bn, from N6.9bn. The company which makes Trophy Lager and Betamalt said that profit fell to N1.4bn, from N1.7bn in 2016.

The brewer which is owned by beer giant AB InBev blamed high input costs for the drop in profit, driven by double digit inflation rate and high foreign exchange rates. Cost of sales rose 48% to N5bn, from N3.4bn.

The firm said that operating income grew 37% to N2.3bn in the three months to the end of June while net finance cost declined 73.2% to N772m from N2.9bn.

International Breweries announced in early June that it was exploring merging with Intafact Beverages Limited and Pabod Breweries Limited, two independently operated breweries controlled by AB InBev. The merger is pending regulatory and shareholder approvals.