FIRST QUARTER RESULTS: International Breweries rough start.

If the first quarter to June this year, then International Breweries PLC is heading for a tough year ending March 2017.

Unfortunately, this will be more because it seems to be working more for its creditors.

According to the first quarter figures released recently, International Breweries seems to be in good control of all aspects of its business except cost of financing the business.

Core turnover increased by 31.6% to N6973.8m and cost of sale grew from a comfortable distance by 27.2% to N3463.9m.

More encouraging was the fact overhead behaved well with marketing cost rising by 9.54% to N396m and cost of administration increasing by only 6.32% to N1333m.

Even income from non core operations contributed its bit by chipping in N1.72m compared to (17.1m) loss at the same time last year.

But financial activities turned out to be the show stopper. Aside from 99.9% drop in finance income to N0.12m, finance charges took a leap to N2888.7m from N362.8m.

Thus, International breweries ended the quarter with a higher N374m loss as against N198m by June 2015.

In other words, the company lost N5.44 on each N100 sale within the period as against N3.71 such loss previously.

It is possible though, that in the remaining nine months. International breweries will work less for the banks.

This is because its liquidity  eased a bit within the period. The working capital deficit of N6514.3m by June 2015 had been reduced to N3482.1m.

INTERNATIONAL BREWERIES: Nm Ist quarter
                     2016.      2015
Total inc. 6875.6.    5342.6
Core inc. 6873.8.    5224.4
C of sale 3463.9.    2722.4
Marketing 396.0.     361.5
Admin.    1333.0.   1253.8
Other inc.    1.72   (17.1)
Other loss (77.2)  (6.51)
Fin. Income 0.12. 118.3
Fin. Cost.  2888.7 362.8
Profit.         (374). (198)
Margin %   (5.44). (3.71)
W. Capital (3482)(65

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