Akwa Ibom-based brewery company, Champion Brew Plc, has released its financial statements for the second quarter of 2020 and it reflects the struggles of companies operating in the brewery industry in Nigeria. The revenue and gross profit of Champion Breweries significantly declined in Q2 2020, just like its market rival, International Breweries.
Champion Brew couldn't surpass the N1.6 billion it generated in second quarter of 2019, as the company could only gross N1.4 billion. In the same period, Champion Brew was able to reduce its cost of production in Q2 this year, reporting N942.5 million as cost of sales, lower than the N985.9 million it recorded in the corresponding period of 2019.
But the reduction in cost of production did little or nothing from stopping the gross profit of Champion Brew, as it reported a significant decline. Champion Brew's total profit fell to N484.7 million in Q2 2020, from the N640.1 million it gross in the corresponding period last year.
Meanwhile, the producer of Champion lager beer and Champ Malta reported N26 million as its Profit before tax, while it had recorded N141.4 million in last year's second quarter. The company also reported a loss in its Profit after tax, as it reported N18.2 million in Q2 2020, lower than the N99.1 million it recorded in Q2 2019.
The losses recorded by Champion Brew - which also provides contract brewing and packaging services to Nigerian Breweries Plc - is caused by the onslaught of coronavirus across various industries. The economic implications of COVID-19 has hit the brewery industry hard, with the lockdown adopted causing businesses to close.
With hospitality and leisure outlets still on lockdown, this is eating into the revenue and profit of Chamipon Brew. Also, the purchasing power of consumers have fallen due to loss of job or salary cut which was forced by the COVID-19 pandemic economic downturn. The brewery industry had only survived the economic policies of President Muhammadu Buhari last year, and now, the companies are being pummeled by the COVID-19 pandemic.