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Nigerian Breweries Falls Most in 2 Weeks as Earnings Disappoint

Oct. 23 (Bloomberg) -- Nigerian Breweries Plc, the local unit of Heineken NV, fell the most in two weeks as nine-month sales came in lower than estimates on weak consumer spending in sub-Saharan Africa’s second-largest economy.

The stock of the West African nation’s biggest brewer snapped four days of gains, retreating 1.1 percent to 174 naira at the 2:30 p.m. close in Lagos, the commercial capital where the company is based, the biggest closing decline since Oct. 7. Nigerian Breweries’ relative-strength index rose yesterday above 70, according to data compiled by Bloomberg, a level that signals to some technical traders a stock is overbought.

Organic beer volume in Africa and the Middle East fell 2 percent, with non-beer volume dropping more than 10 percent, Heineken, the world’s third-largest brewer, said today. Weak demand in Nigeria, the continent’s second-biggest beer market, has weighed on earnings, Chief Financial Officer Rene Hooft Graafland said on a conference call. The Amsterdam-based company cut its outlook on full-year profit after third-quarter sales missed estimates.

“Earnings were below our expectations as volume growth disappointed,” Esili Eigbe, a Lagos-based analyst at Stanbic IBTC Holding Co. with a sell rating on Nigerian Breweries, wrote in a client note today. “Softness in consumer spending in Nigeria has resulted in weaker beer volume growth as the Nigerian consumer prioritizes spending.”

Nine-month revenue through September rose 5 percent to 190.3 billion naira ($1.2 billion) from 180.7 billion naira in the same period a year earlier, Nigerian Breweries said in a statement posted on the Nigerian Stock Exchange website. Net income climbed 6 percent to 26.8 billion naira.

The company’s stock has advanced 18 percent this year, compared with the 33 percent gain of the Nigerian Stock Exchange All-Share Index.

To contact the reporter on this story: Chris Kay in Abuja at

To contact the editor responsible for this story: Vernon Wessels at

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