Manufacturers in Nigeria have continued to lament the high cost of operation in the country, calling on the Federal Government to address the situation to aid productive activities.
The Managing Director/Chief Executive Officer, Nigerian Breweries Plc, Mr. Michiel Herkemij, said the major challenge in the past year had been power generation.
According to him, Nigerian Breweries has spent a large amount of its turnover, about N10bn, in sourcing for alternative sources of power in the past year.
This, he said, had affected the company’s profits.
Herkemij, who was speaking during the company’s pre-annual general meeting, said that this represented about seven per cent of total turnover for the financial year ended December 31, 2008.
He said, “The company was confronted with a lot of challenges in 2008. Paramount among these challenges are the high increase of input cost due to unforeseen huge price increases for grains and distribution associated with diesel.
“In fact, about seven per cent of our total income in 2008 was expended on power generation due to the epileptic nature of public power supply.
“However, we were able to put in place significant internal efficiency measures to reduce costs in other areas of our operations.”
He, however, said that the company still recorded significant improvement in its financial performance in the year under focus despite the challenges.
The company‘s turnover grew by 30 per cent, up from N111.748bn in 2007 to N145.462bn in 2008.
Its operating profit also rose to N36.78bn, up from N27.36bn recorded the previous year, representing an increase by 34 per cent.
Profit after tax increased by 36 per cent from N18.94bn in 2007 to N25.7bn.
In his address, the Chairman of the company, Chief Kolawole Jamodu, said that the company would continue to partner with government to grow the economy.
He also said the company hoped to increase its investment in the expansion of its various production lines, acquisition of new crates and bottles to boost production capacity among others.
”On our future prospects, we will continue to make sure that our products are well made to meet the needs of individuals and more competitive in the Nigerian and foreign markets,” he said.
The company is proposing a total dividend of N25.71bn to shareholders, representing a dividend of N3.40 per share.
( Source: Punch)