Monday February 18, 2019 / 9:00 AM /NSE With Additional Comments from FBNQuest Research
NB’s FY PBT of N29.4bn implies that its earnings track behind ours and consensus 2018E PBT forecasts of N31.9bn and N34.7bn respectively. Following the results, we anticipate a neutral-to-negative market reaction, which could lead to NB shares reversing some of the +12% gains made over the past two weeks.
No obvious positives.
Net sales were down by -4% y/y during the quarter, while PBT declined by -43% y/y, largely driven by a -348bp contraction in gross margin to 37.3%. The results in our view are reflective of a decline in sale volumes due to stronger competitive headwinds, cost input inflation, and an increase in taxes following a change in the excise duty regime.
The company has proposed a final dividend of N1.83 per share which translates to a yield of 2.2%. The dividend per share is around 54% lower than our N2.82 forecast (N3.11 for consensus).
Year-to-date, NB shares have underperformed the index. The shares have shed -2.9% ytd compared with the +4.1% ytd return delivered by the ASI.
We rate the shares Underperform. Our estimates are under review.
Nigerian Breweries Q4 2018 results: actual vs. FBNQuest Capital Research estimates (N millions)
Source: NSE; FBNQuest Estimates