Nigerian Breweries Posts N44.6bn Profit In Q1 2025

Nigerian Breweries Plc has bounced back to profitability with a net profit of N44.6 billion in Q1 2025, marking a dramatic turnaround from a N52.1 billion loss in the same period last year.

The result highlights a resurgence for Nigeria’s largest brewer, following two years of FX-related losses that strained its bottom line.

The unaudited Q1 2025 financials, released last week, show a 186 percent year-on-year rebound, buoyed by stable exchange rates, double-digit revenue growth, and cost containment across major expense lines. According to a note from CardinalStone Research, the results were “primarily driven by strong revenue growth, tamer cost pressures, and a sharp decline in FX losses.”

Revenue Surges, FX Losses Plummet

The brewer’s top line rose by 68.9 percent to N383.6 billion, up from N222.2 billion in first quarter (Q1) 2024. The boost was largely attributed to volume-driven growth, as indicated by its parent company, Heineken. Compared to N123.3 billion in Q1 2023, the threefold increase over two years signals a resilient commercial rebound, despite macroeconomic headwinds.

A key driver of this improved performance is the steep drop in FX losses, which narrowed to just N178 million in Q1 2025, from a staggering N72.9 billion in the same period last year. The naira’s relative stability in early 2025 helped ease currency-related pressures on the brewer’s import-heavy cost structure.

However, risks remain. The naira has already weakened by five percent in April, reigniting concerns among FMCG investors. “The recent tariffs from the U.S. government and weakening naira are shifting the outlook, especially for consumer goods companies,” said Kemi Abiodun, an analyst at CardinalStone. The FMCG sector collectively booked N1.33 trillion in FX losses in 2024.

Improved Margins, Controlled Costs

Beyond top-line growth, Nigerian Breweries recorded improvements in operational efficiency. Its cost of sales increased by 49.5 percent—well below the 82.9 percent rise recorded in Q1 2024—resulting in a 7.4 percentage point jump in gross margin to 43.4 percent. The firm’s ability to keep operational expenses in check also stood out, with OPEX rising 45.8 percent year-on-year.

Still, the rise in advertising and sales promotion costs—up 86.9 percent—posed a pressure point, even as operating profit margin doubled to 22.2 percent from 11.1 percent in Q1 2024.

Finance costs dropped sharply by 83.2 percent to N15.3 billion, largely due to FX stability. Simultaneously, finance income surged by 86.6 percent, adding further support to net earnings.

Cash Flow Concerns Amid Profit Recovery

Despite the stellar profit rebound, Nigerian Breweries saw a significant deterioration in its cash position. Operating cash flow turned negative, impacted by a N75.5 billion rise in receivables and a N68.9 billion drop in payables. Net operating and investing cash flows declined by N66.1 billion and N10.3 billion respectively, leading to a drop in total cash reserves to N93.1 billion—down from N150.6 billion a year earlier.

The only positive inflow came from financing activities, which added N16.8 billion to the balance sheet.

Nigerian Breweries’ Q1 2025 result offers clear evidence of recovery, with strong revenue momentum, robust margins, and a significantly lighter FX burden. However, the firm’s strained liquidity and a weakening naira introduce caution into the medium-term outlook.

For investors, the company’s earnings momentum may prove sustainable if FX pressures remain muted and consumer demand stabilises. But the current FX trajectory and policy risks will need close monitoring in the quarters ahead.