INTERNATIONAL BREWERIES HOLE IN THE POCKET

There was one hole in the pocket of International Breweries PLC during the nine months to December 2015 that could hold it to ransome come financial year end: Losses from non core business.
According to the figures for the period released last week, the income stream simply called Other gains that chipped in N129.4m by December 2014 this time came up with N169.3m loss that brought sour taste to hitherto tastee cooking.
International Breweries total income had grown by 8.06% to N16694.6m from N16449.8m ahead of core business revenue that closed the period 7.49% up at N16460.8m from N15313.2m.
This was because another income stream simply called Other income ended 93.9% up at N11.4m from N5.88m.
Finance income did far better rising to N222.4m from N1.32m.
From the cost side of the equation, direct cost behaved well rising by only 4.56% to N7812.3m to N8168.7m. Not so for overheads which at N4843.5m was 16.4% up on previous N4161.4m.
Incidentally in spite of 692.3% increase on current borrowings to N4597.8m from N580.3m, finance costs decreased by 9.94% to N1108.3m from N1230.6m.
Hence International Breweries ended the period with only 7.09% increase in profit before tax to N2404.8m from N2245.5m. This being lower than the growth recorded in total income, gain on each N100 income eased to N14.4 from N14.5 previously.
SO:
* No resting on the current profit growth level if the dream is to truly end the current year better than the company did in previous year.
* That means the hole in other gains needs closer look in addition to the top period growth recorded in overheads.

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