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NBC posts N64.7bn turnover in third quarter

Nigerian Bottling Company (NBC) has posted a turnover of N64.74 billion and Profit After Tax (PAT) of N1.29 billion for the third quarter 2009.

The company recorded an Extraordinary Item amounting to N1.00 billion, resulting in Profit After Tax (PAT ) and Extra Ordinary Item of  N2.29 billion.

According to Vetiva Capital Management Limited, Research unit, “The result was in line with our turnover forecast of N64.85 billion, while PAT was below expectation of N2.29 billion  respectively. NBC’s performance was quite notable, relative to its performance in the corresponding quarter of the last financial year (though we note that last year’s performance was impacted by the fire incident at its Benin plant), however, the results were less impressive than expected.” The company recorded a PAT of N1.291 billion before Extraordinary Item, relative to N974 million , in 2008″

Furthermore, Vetiva  noted that there was a significant increase in the effective taxation. ( The
company had deferred tax liability of N3.34 billion as at 2008.)

According to Vetiva, “ We attribute the Extraordinary Item recorded to insurance claims paid in respect of the fire incident noted above. Total claims in connection with the incident was N3.16 billion out of which N2.00 billion has been paid, with the balance of N1.16 billion expected to be paid out at the end of its 2009 financial year.

According to the company, the re-construction & upgrading of its equipment at the Benin plant has been completed, thereby significantly reducing costs associated with the outsourcing of packaging of its Five Alive brand.

In recent times, NBC’s juice brand ‘Five Alive’ had witnessed intense competition from other players (such as ‘Chivita’ and ‘Dansa Drinks’). However, NBC has risen to the challenge with the introduction of its new and innovative variants of ‘Five Alive’ into the market as well as new improved and attractive packages and bottles for ‘Five Alive’ and
‘Coke’ respectively.

These innovations have been met by positive consumer demand and has enabled the firm successfully reclaim some previously lost market share. In light of the above, our expectation is that the increasing penetration of the ‘Five Alive’ brand will positively impact top line in subsequent quarters.

Contrary to rumors about the relocation of NBC plants from Nigeria, (which majorly came on the heels of the closure of NBC’s concentrate plant in Ogun State); management has reiterated its commitment to the Nigerian market.

The company outlined major investments during the year to include: the construction of an ultra modern bottling plant in  Abuja, re-construction of its Benin plant in Edo State, the on-going upgrade of 13 bottling facilities across the country, the introduction of new lightweight and durable ultra glass packaging for core brands, as
well as on-the-go packaging facilities for the soft drinks.


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