Mounting losses at Seven-Up lead to ₦10.3bn loss in nine months

Mounting losses at Seven-Up lead to ₦10.3bn loss in nine months

By Tunde Osho

Seven-Up Bottling Company Plc (“SBC”) has reported its nine months results with the ailing company posting a net loss of ₦10.3bn, a 113% increase from the ₦4.8bn loss it recorded in the previous year.

The company, which recently exited the Nigerian Stock Exchange over its continued dismal performance in recent years, said that revenue grew 9.75% to ₦83.2bn in the nine months to the end of December. In the same period in 2017, the company recorded ₦76bn in sales.

However, selling and administrative expenses spiked 40% and 38% respectively due to inflation, naira devaluation and higher borrowing cost. The higher borrowing cost is reflected on the net finance cost which surged 73.38% to ₦5.5bn, from ₦3.2bn, adding to the company’s woes.

Seven-Up announced in November that it had received an offer from Affelka S.A, its majority shareholder to acquire the remaining shares of minority shareholders it does not already own as its losses continued to mount due to the effects of the recession on the business and competition from both existing and new entrants. Under a “Scheme of Arrangement” and Court-Ordered resolution in early January, Affelka took control of the 26.8% minority shares it did not already own, increasing its holding in Seven-Up to 100%.

Affelka said it wanted to take the firm private to restructure and enhance its product portfolio so it can compete with its industry rivals. The “Scheme” led to the voluntarily delisting of 7-Up Bottling Company Plc from the Daily Official List of The Exchange.