Champion Brew Plc has reported its lowest profit in a span of seven years for the first half of 2023, reflecting a decline of 269.4 percent to N29.1 million compared to N1.07 billion recorded in the corresponding period of 2022.
The decline can be attributed to the cash crunch that played out in the first quarter of the year, coupled with the ongoing upward trend in inflation.
According to the National Bureau of Statistics, Nigeria’s inflation rate rose to 22.79 percent in June 2023 from 22.41 percent recorded in May 2023.
The decline in profit is also evident in its revenue figures, with a reduction of 13.22 percent to N5.71 billion during the first half of 2023 from N6.58 billion achieved in the same period of 2022.
A significant portion of the manufacturer’s total revenue, approximately 77.58 percent, was consumed by the cost of sales, amounting to N4.43 billion in the first half of 2023.
This marked a 5.48 percent increase from the N4.20 billion recorded in the corresponding period of 2022.
Operating expenses recorded a rise of 29.4 percent to N1.24 billion during the first half of 2023, compared to N958.8 million recorded in the same period of 2022.
This surge was primarily propelled by a 56 percent increase in selling and distribution expenses.
The financial performance also showcased a decrease in finance income, declining to N10.53 million in the first half of 2023 from N53 million recorded in the corresponding period of 2022.
In contrast, finance costs experienced a 13.18 percent upswing, reaching N40.53 million in the first half of 2023 from N35.81 million in the corresponding period of 2022.
Total equity and liabilities stood at N17.83 billion in the period under review.
Champion Brew’s cash and liquid cash (cash equivalents) witnessed a decline of 51.78 percent in the first half of 2023, reaching N1.35 billion from N2.81 billion recorded in the same period of 2022.
The cash generated from operating activities surged by 185.7 percent to N4 billion during the first half of 2023, indicating the company’s ability to generate sufficient cash to cover its short-term liabilities.
This marked an increase from N1.4 billion in the same period of 2022, largely due to trade and other payables amounting to N2.4 billion.
Even after factoring in all deductions, net cash from operating activities exhibited an increase of 113.2 percent to N1.55 billion in the first half of 2023 from N727.39 million recorded in the same period of 2022.
Furthermore, net cash used in investing activities incurred a loss of N2.322 billion in the first half of 2023, from a loss of N698.4 million recorded in the same period of 2022. This was attributed to the acquisition of property, plant, and equipment.
Net cash flow from financing activities posted a loss of N61.77 million in the first half of 2023, from a loss of N90.39 million recorded in the same period of 2022.
