IBPLC Vows Investors Of Growth After Successful Rights Issue

After the largest equity offering in the Nigerian capital market, International Breweries Plc (IBPLC) has reaffirmed its commitment to sustainable growth, signalling confidence among its investors and stakeholders.

The company’s recent rights issue facilitated the repayment of its substantial forex-denominated loan, marking a key moment for its financial health and positioning for future expansion.

His Royal Majesty (HRM), Nnaemeka Achebe, Chairman of IBPLC’s Board of Directors, commended the company’s resilience and progress in a statement to shareholders. He highlighted the importance of the rights issue in eliminating the company’s foreign exchange exposure, which had long affected its financial stability.

“The elimination of our FX exposure will improve IBPLC’s cash flows and support the company’s return to profitability,” said HRM Achebe, attributing the success to IBPLC’s core shareholder, Anheuser-Busch InBev (AB InBev), which fully subscribed to the offer.

“This strong backing from AB InBev highlights their confidence in the Nigerian market and economy,” he said.

HRM Achebe also celebrated the repayment of the company’s outstanding $379.9 million loan, made possible by AB InBev’s support.

“This recapitalisation not only strengthens our balance sheet but also sets the stage for long-term profitability and growth. We are now better equipped to drive innovation, improve operational efficiency, and seize new opportunities.”

The recent company’s 47th Annual General Meeting (AGM) provided a platform to discuss its future strategies, outline achievements, and emphasize the critical role shareholders have played in IBPLC’s recovery. A notable highlight was the successful Rights Issue of 161,172,395,100 shares, which generated net proceeds of N581.7 billion.

IBPLC’s financial performance for 2023 also showcased significant improvements. Revenue surged by 19.2 percent, reaching N260.6 billion, up from N218.7 billion in 2022. Gross profit climbed by 17.3 percent to N86.3 billion. However, the company faced a sharp increase in finance costs, which surged by 178 percent due to forex losses from currency devaluation and higher interest expenses. Despite these challenges, IBPLC remains committed to innovation, customer satisfaction, and responsible business practices.

Managing Director (MD) of IBPLC, Mr. Carlos Coutino, acknowledged the difficulties posed by inflation and forex losses but emphasised the company’s ongoing efforts to streamline operations and manage costs.

“We will continue to manage our costs tightly through our different cost management strategies as we remain focused on delivering value to our customers and driving innovation,” he said.

IBPLC’s investments in new products, strategic partnerships, and state-of-the-art facilities were highlighted as key drivers of growth. Shareholders at the AGM expressed optimism about the company’s future, with many noting the significance of repaying the foreign loan.

Mr. Eke Chibuzor, General Secretary of the Independent Shareholders Association of Nigeria (ISAN), commended the company’s financial turnaround.

“While dividends have not been declared, the 19 percent revenue growth is a clear sign of progress. The repayment of the foreign loan is a significant milestone, and the future looks promising for IBPLC and its shareholders,” he said.

Also, at the AGM, two key appointments were also confirmed.  These appointments include Mrs. Temitope Oguntokun, the Corporate Affairs and Regulatory Director, as Executive Director, and Mrs. Chijioke Nkechinyere Ugochukwu as Independent Non-executive Director.

The rights issue, which opened on May 21, 2024, and closed on June 10, 2024, allowed shareholders to increase their ownership by subscribing to six new shares for every one held at N3.65 per share. The offer was met with enthusiasm, attracting new investors and contributing to the company’s expansion.

With the approval of the Securities and Exchange Commission (SEC), the successful completion of the rights issue marks a transformative period for IBPLC. In converting long-term debt into equity, the company is now better positioned to pursue new growth initiatives with reduced financial burden and greater stability.