Earnings Update: International Breweries Plc Q3 2024 – Bottomline Remains Pressured Amid Elevated Costs and FX Losses.

Event

International Breweries Plc (“the Group”) achieved a remarkable 78% year-on-year increase in revenue, reaching N120.25 billion in Q3 2024, up from N67.65 billion in Q3 2023. This growth was primarily driven by strategic pricing changes implemented to counter rising input costs, as well as the effect of reduced consumer purchasing power, which we believe impacted volume sales.

The cost of sales rose faster than the revenue, surging by 84% to N87.99 billion, up from N47.77 billion in Q3 2023, reflecting persistent inflationary pressures and the impact of depreciation of the Naira.

Corporate Action

In August 2024, the Group listed 141,429,525,556 shares resulting from a rights issue of 161,172,395,100 ordinary shares at 2 kobo each, priced at N3.65 per share, achieving an 87.75% subscription rate.

With this additional listing, the total issued and fully paid-up shares of International Breweries Plc increased from 26,862,065,850 to 168,291,591,406 ordinary shares.

Outlook

We revised our fair value estimate upwards to N4.56 (previously: N4.23). However, since our last report, the stock price has gained significantly, surging by 38% and currently trades by N5.55. We believe the stock is currently overvalued and we now recommend a SELL for the stock.

Please follow the link “International Breweries Plc Q3 2024 – Bottomline Remains Pressured Amid Elevated Costs and FX Losses” to view the whole report.

Thank you.