Champions Breweries Plc sustained the losing streak posted in first quarter of last year with a fresh N823.8m operating loss incurred between January and February 2024.
The company which is famous for its beer brand, Champion Beer and Champ Malt saw revenue growth of N4.5bn compared to the N2.6bn recorded in Q1 last year, in a sign of confidence that consumers are back to its products.
However, Nigeria’s third oldest brewery saw its Q1 revenue eroded by the scorching N2.8bn cost of sale, N970.7m selling and distribution expenses and another N602m administrative expenses which amounted to a cumulative N4.42bn.
The brewer’s Q1 financial report analysed by NewsNGR shows its net finance cost for the period amounted to N751m against the N18m incurred in 2023 Q1.
Champions Breweries suffered foreign exchange loss and interest on the loan for the three-month period ended 31st March 2024 amounting to N743m as interest rate on borrowings jumped in the period.
The brewer recoded zero finance income from January to March 2024, the books reveal.
Champions Breweries plunged into a negative working capital position last year which widened by N2.95bn after the brewer’s current liability grew to N8.95bn while the current assets grew marginally to N6bn in first quarter 2024.
When a company falls into negative capital, “it may struggle to pay off its debts in the short term”, according to experts.
In February 2024, Champion Breweries announced that EnjoyCorp Limited, a holding company established for food, beverage and hospitality brands reached agreement with Heineken B.V, to acquire 100 per cent of its shareholding in The Raysun Nigeria Company Limited.
The Raysun Nigeria Company Limited holds a 86.5 per cent stake in Champion Breweries Plc.
Based on the agreement, Heineken will continue to support Champion Breweries for a twelve-month period after the transaction has closed to ensure a smooth transition of ownership.