Nigerian Breweries has returned to profitability, bringing respite to the biggest beer maker in Africa’s most populous nation after two years of FX-induced losses dealt a blow to the company’s earnings.
The Lagos-based firm declared a net profit of N44.6 billion in its 2025 unaudited first quarter results, a 186 percent rise from the N52.1 billion loss recorded in the same period last year.
“Strong revenue growth, tamer cost pressures, and a sharp decline in FX losses primarily drove this performance,” analysts at CardinalStone Research said in a note last Thursday.
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The recent stability of the naira against the US dollars saw a sharp drop in FX-induced losses as it fell to N178 million in the first three months to March compared to N72.9 billion in the corresponding period last year.
But the naira has begun to reverse its gains, shedding about 5 percent of its value against the US dollars this month and fanning fears of a mixed outlook for fast-moving consumer goods (FMCG) firms which endured a combined N1.33 trillion in exchange rate losses last year.
“I had an optimistic outlook especially for the stability of FX which should be positive for the FMCG sector, however the recent tariff imposed by the US government seems to be changing the direction of things, hence posing a significant downside risk to the sector’s performance,” Kemi Abiodun, consumer goods analyst at CardinalStone said.
The beer maker also recorded a 68.9 percent increase in revenue, reaching N383.6 billion, primarily driven by better-than-expected volume growth, as highlighted by its parent company, Heineken. This is a notable rise from N222.17 billion reported in 2024 and N123.31 posted in 2023.
Analysts say the rise in revenue of consumer goods firms are likely to be price driven rather than demand-driven as consumers’ disposable income is still squeezed and inflation bites.
But this rise in revenue, alongside a more moderate increase in the firm’s cost of sales which rose 49.5 percent compared to 82.9 percent in Q1’24, resulted in a 7.4 points increase in gross margin to 43.4 percent.
The company’s operational expenses (OPEX) increase was also relatively contained at 45.8 percent, with advertising and sales expenses rising by 86.9 percent, serving as the main notable pressure point. Hence, operating profit margin doubled to 22.2 percent from 11.1 percent in the first three months of 2024.
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Net finance costs declined by 83.2 percent to N15.3 billion, driven by a sharp reduction in FX losses. Finance income also increased by 86.6 percent, further supporting bottom-line growth.
Despite the strong topline performance, the company’s cash position weakened during the period. This deterioration was driven by negative cash flows from both operating activities which declined by N66.1 billion and N10.3 billion respectively, outweighing the N16.8 billion inflow recorded from financing activities.
The operating cash outflow was primarily due to a N75.5 billion increase in receivables and a N68.9 billion reduction in payables. Overall cash position declined to N93.1 billion as against N150.6 billion in the same period last year.
