Event: International Breweries (IBL) reports Q2 2018 results. Similar to its Q1 2018 results, the company did not provide comparable numbers for prior year. As such, we are unable to do y/y comparisons.
Implications: IBL’s pre-tax loss of –N.2.6bn in Q2 came in worse than our –N1.7bn forecast. Following the disappointing results, we expect the market’s reaction to be negative.
Negatives: IBL reported pretax and after-tax losses of –N2.7bn and -N606m respectively. These losses compare with pre-tax and post-tax losses of –N2.4bn and –N2.2bn that the company reported in Q1 2018. Compared with our forecasts, sales missed by 7%. IBL’s pre-tax loss missed our forecast. Sequentially, the weak earnings were underpinned by a -32% q/q reduction in other operating income and a 59% q/q rise in other losses.
We rate International Breweries shares Neutral. Our estimates are under review.