INTERNATIONAL BREWERIES PLC  –  “OUR STOCK OF THE WEEK –  SEPTEMBER 10, 2021”

INTERNATIONAL BREWERIES PLC – “OUR STOCK OF THE WEEK – SEPTEMBER 10, 2021”

International Breweries PLC emerged the NSE30 stock of the week ended September 10, 2021.  Share price and market capitalization appreciated by 3.23%; gaining N4.03b W-o-W; closing at marketing capitalization of N128.94bn.

On the other hand, the NSE 30 dipped further by -0.31%; losing N54.68bn compared to previous week ended September 3, 2021.

On Thursday, September 16, 2021, the ASI YTD performance worsened to -3.38%, as the ASI declined 0.15% to settle at 38,911.31 points due to sell pressure in stocks like INTBREW, DANGSUGAR, WAPCO, GTCO, UBN and ETERNA.

S/N WEEK – 3/9/21WEEK – 27/8/21
  % +/(-)AMT IN BN% +/(-)AMT IN BN
1Okomu Oil0.00%0.000.00%0.00
2Presco Plc0.00%0.008.90%6.50
3Guinness Nig Plc0.00%0.000.00%0.00
4International Breweries3.23%4.03-1.06%-1.34
5NB Plc1.35%5.20-7.69%-31.99
6Dangote Sugar-0.85%-1.82-0.56%-1.21
7Flour Mills-3.50%-4.133.45%4.10
8NASCON Allied Ind.0.00%0.000.00%0.00
9Nestle Plc0.00%0.000.00%0.00
10Unilever Nig Plc0.00%0.000.00%0.00
11Transcorp Plc-3.19%-1.222.17%0.81
12Access Bank0.00%0.001.10%3.55
13ETI-9.09%-12.370.92%1.24
14FBNH0.67%1.790.00%0.00
15FCMB1.69%0.99-3.91%-2.38
16Fidelity Bank-2.13%-1.45-2.08%-1.45
17GTB Plc-2.87%-23.541.09%8.83
18StanbicIBTC-2.39%-12.31-3.05%-16.20
19Sterling Bank-0.66%-0.29-1.95%-0.86
20UBA Plc-1.94%-5.133.33%8.55
21UBN0.00%0.00-1.96%-2.91
22Zenith Plc-0.41%-3.14-1.23%-9.42
23Custodian Investment2.29%0.883.15%1.18
24MTNN0.00%0.000.00%0.00
25BUA Cement0.00%0.000.00%0.00
26Dangote Cement Plc0.00%0.00-1.84%-78.39
27Lafarge (WAPCO)0.00%0.001.82%6.44
28Seplat Petroleum0.00%0.000.00%0.00
2911 Mobil Plc0.00%0.000.00%0.00
30Total Plc0.00%0.000.00%0.00
 NSE-30 INDEX-0.31%-54.68-0.62%-104.94

International Breweries Plc was incorporated in December 1971 by its founder and first Chairman, Dr. Lawrence Omole under the name International Breweries Limited. The Company commenced production of its flagship product Trophy Lager in December 1978 with an installed capacity of 200,000 hectoliters per annum.  Other brands packaged and marketed by International Breweries Plc include Castle Milk Stout, Castle Lager, Redds, Hero, Grand Malt and Voltic Water.

Currently, INTERBREW is unprofitable and not forecasted to become profitable over the next three years.  For the years 2020, 2019 and 2018, the company declared loss after tax of (N12,365.08) Million, (N27,790.67) million and (N3,933.45) million respectively. The loss continued in 2021.  For the H1 2021 ended June 30, 2021, it declared a net loss of (N11,308.63) Million. The last time the company declared profit was in 2017; a profit of N1,395.23 Million.

In terms of return, it posted a good return, better than the NG Breweries and NG Market with relatively low volatility in share price movement.  Still on the positive side, the stock is considered undervalued; trading (N5.00) 75.5% below its estimated fair value of N20.39.  Picking undervalued stock is good especially with the anticipation of a sustained depressed sentiment as the market within the week ended September 17, 2021 witnessed bargain hunting for bellwether stocks.

However, because the company is unprofitable, its PE ratio could not be compared to the African Beverage Industry and the NG market.  Typically when you are buying stock in a company with a negative P/E, you should be aware that you are buying shares of an unprofitable company with associated risks.

Idika Aja, ACS, writes from Lagos and can be reached on 08034003768

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