Nigerian Breweries Plc has reported a strong comeback in its financial performance for the first quarter of 2025, bouncing back from deep losses to post a pre-tax profit of N69.9 billion. This marks a sharp reversal from the N65.5 billion pre-tax loss it recorded in the same period last year, driven largely by improved revenue and a steep decline in foreign exchange losses.
The company’s net revenue surged by 68.91 percent, rising from N227.1 billion in Q1 2024 to N383.6 billion in Q1 2025. The impressive growth in top-line income comes amid a difficult macroeconomic backdrop where inflation remains high, but consumer demand appears to be holding steady for premium and mass-market alcoholic beverages.
Breweries across Nigeria were among the hardest-hit industries following the naira devaluation that began in mid-2023. The sharp depreciation in the local currency dramatically raised the cost of imported raw materials—such as barley, hops, and packaging equipment—which are heavily dollar-denominated. For Nigerian Breweries and its peers, this meant ballooning foreign exchange losses, even as they struggled to preserve market share in an inflation-weary consumer market.
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In 2024, Nigerian Breweries had reported a full-year foreign exchange loss exceeding N145 billion. Guinness Nigeria and International Breweries, other major players in the sector, also posted staggering losses, citing forex volatility as the major drag on their earnings. The industry’s dependence on imported inputs exposed it to significant currency risk, and with the naira losing over 100 percent of its value at some point, balance sheets were severely battered.
However, for Q1 2025, Nigerian Breweries appears to have clawed its way back, in part due to better forex risk management and a more stable currency environment. The brewer reported just N178.01 million in net foreign exchange losses this quarter—a near-total reversal from the N72.8 billion it lost in the same quarter a year ago. This development has helped the company restore profitability after several quarters of negative earnings.
Cost of sales for the period stood at N217.06 billion, a 49.45 percent increase from N145.2 billion in Q1 2024. Although input costs remain high, the company succeeded in widening its gross profit margins. Gross profit doubled to N166.5 billion from N81.8 billion, a 103.43 percent increase year-on-year. This suggests a combination of improved pricing strategy and perhaps a recalibration of its product mix to better absorb cost shocks.
Selling and distribution expenses rose to N66.2 billion, up from N45.01 billion in the previous year, reflecting continued investment in logistics and marketing across the company’s wide product portfolio. Nonetheless, the brewer managed to report N85.2 billion in operating profit, a 237.48 percent increase compared to the N25.2 billion recorded last year.
Finance income grew by 86.65 percent, reaching N264.4 million, while finance costs declined from N18.1 billion to N15.3 billion, reflecting improved capital management and possibly a reduction in exposure to high-interest loans.
This recovery comes at a critical time for the Nigerian beer industry, which has been contending with shrinking margins, weak consumer spending, and regulatory uncertainties. The ability of Nigerian Breweries to post a profit could set the tone for a more optimistic outlook in the sector, though experts caution that the macroeconomic environment remains fragile. Inflation remains elevated, and the risk of another currency shock looms if oil revenues or external reserves decline further.
Shares of Nigerian Breweries closed at N36.20 on April 17, 2025, marking a 13.13 percent year-to-date gain. While the stock has struggled in recent years due to persistent losses and investor skepticism, the latest results may offer a renewed sense of confidence in the brewer’s long-term prospects, especially if it can sustain this level of performance in the quarters ahead.
Still, analysts warn that the path forward remains challenging. The company, like others in the FMCG and beverage sector, must navigate not only currency risks but also rising production costs, changing consumer preferences, and increasing competition from lower-cost substitutes.
Whether this Q1 rally marks the beginning of a sustained turnaround or just a temporary reprieve will depend on Nigerian Breweries’ ability to stay agile, manage supply chain shocks, and adapt to consumer needs in a still-volatile economy.