International Breweries, makers of Budweiser, Hero Lager and Trophy, among other beer brands, has recorded a loss of N17.65 billion in its financial year 2021, ended December 31.
This comes as the brewer spent a whooping N17.67 billion on marketing and advertising.
The company, which is pushing to displace Nigerian Breweries as the biggest brewer in the country, had upped its promotional expenses to drive growth, and has successfully established such brands as Trophy Lager Beer, Betamalt, Budweiser, Hero Lager and Eagle Lager as the preferred drink for many Nigerians.
However, having spent N12.65 billion in 2021, it weighed down heavily on its top line.
The company’s marketing yielded 1.23% growth in revenue, generating N182.29 billion in 2021, against the N136.79 billion it recorded in 2020.
Cost of production, however, consumed a significant share of the turnover for 2021, as the brewer spent N135.99 billion, which is over 90% of its generated revenue for 2020, to produce its products last year – This is 27.9% higher than the N106.31 billion cost of sales for 2020.
The rising expense weighed on the gross profit, which International Breweries reported to be N46.30 billion for last year, although it surpassed the N30.47 billion the company recorded the previous year.
But the jump in gross profit had little impact as International Breweries ended 2021 with N17.65 billion loss for the period, surpassing the N16.08 billion loss recorded during the corresponding period.
This means International Breweries lost almost exactly the amount (N17.67 billion) it spent on marketing between January and December 2021.