NB Declares N19.44bn PAT in Q4 2018 Results; Proposes N1.83k per share Final Dividend(SP:N83.00k)

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Monday February 18, 2019 / 9:00 AM /NSE With Additional Comments from FBNQuest Research

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Implications

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.

  

Positives

No obvious positives.

 

Negative

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)

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Source: NSE; FBNQuest Estimates


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