The combination of internal and external functions, which increased losses in 2024, has eased, and cost and income structures have adjusted to create room for the long-elusive profit delivery for brewers.
A fundamental change in the industry’s narrative is that consumers are returning to bars and joints after years of reduced appetite caused by a broken consumer spending capacity. Markets are resettling after volatile policies, and after the adjustments, consumers have begun voting for brewed products once again.
Brewers generally confirm that consumers are returning to their products from the long holiday. Stagnating sales ended for Nigerian Breweries in 2023, and a new chapter of growth opened last year with an increase of 79 per cent to launch the company into the trillion-naira turnover league for the first time.
The strength of elevated sales revenue is sustained for Nigerian Breweries for the second year in 2025, with a year-on-year rise of N156.5 billion or 69 per cent in net sales to N383.6 billion in the first quarter.
Guinness Nigeria’s new momentum in sales is noticeable in its 2024/25 financial year that ended in June. From sales numbers that stagnated between N206 billion and N299 billion for three years up to 2024, Guinness sprang from a new growth momentum of 71.6 per cent year-on-year to a turnover of N378 billion by the end of its third quarter trading in March 2025. That is already a clear N78.5 billion above the full-year revenue figure for the preceding financial year.
International Breweries found a new strength in selling in 2024, breaking free from years of stagnated sales to a surprising leap of 87.6 per cent to register a turnover of about N489 billion for the year. The newfound strength is yet to recede in the current year, with sales revenue up 70 per cent year-on-year to N173.6 billion at the close of the first quarter in March.
For four years up to 2023, Champion Breweries did not grow the sales revenue by up to N6 billion; however, a turning point came in 2024 when it raised turnover by 66.7 per cent to under N21 billion. The company has gained further speed in the current year, with sales revenue advancing by nearly 94 per cent year-on-year to N8.5 billion at the end of the first quarter.
Growing sales revenue is accompanied by internal changes that have redressed cost and income structures to carve out room for profit among the companies.
Necessity compelled Nigerian Breweries to reinvent its corporate financial strategy, resulting in paying off exchange loss-generating foreign debts and high-interest-bearing local borrowings. The actions have closed the floodgate of foreign exchange losses that towered to N337 billion in three years to 2024.
A consequent drop in net foreign exchange losses from nearly N73 billion in the same quarter last year to N178 million in the first quarter ended March 2025 has enabled the company to return to profit.
The debt restructuring initiative has eased the pressure from the finance expenses on the company’s revenue. From an increase of 173.5 per cent in net finance cost to N252.8 billion at the end of 2024, net finance expenses have reversed to a drop from N90.8 billion in the first quarter of last year to N15.3 billion at the end of the first quarter in March 2025.
With further cost savings from production and operating expenses, Nigerian Breweries has broken free from two years of huge losses that submerged its capital base and delivered an after-tax profit of N44.6 billion to shareholders at the end of the first quarter operations – the first quarterly profit delivery for the company in almost three years.
Part of the initiative is an injection of fresh capital by rights issue, which has helped to reduce retained deficit and recharged shareholders’ funds to power the recovery phase.
Guinness Nigeria’s third quarter, which runs from January to March, marks the company’s turning point back to profit after two and a half years of huge losses and preceding years of volatile earnings records. The quarter produced a profit of N7 billion, which absorbed a moderate loss at half-year and returned the company to a profit of N6.7 billion at the end of the third quarter.
Internal changes in operations that have halted losses and rebuilt profit for the company include slowing down production costs as sales grew, a move that saw gross profit more than double at 105 per cent year-on-year to N44.5 per cent for the third quarter.
Cost savings from operating expenses increased operating profit more than three times in the quarter, and the big news is that finance incomes and expenses are changing direction. While finance costs have tilted sharply to a downward slope, finance income is on a steep upward climb, as exchange losses reverse to gains.
International Breweries’ long-running losses peaked at N113.6 billion at the end of 2024, but that seems to have come with a ceiling of thus far but no further. A big turnaround occurred in the first quarter of 2025, from a net loss of over N60 billion in the same quarter of last year to a net profit of over N29 billion.
The company has implemented sales and production cost adjustments that stretched out gross margin and also removed exchange losses, shifting operating results from loss to profit.
The big event, however, is a change in reading financial income and expenses. Finance income is on a high-grade multiplier, and finance cost is down to a fraction of the corresponding numbers, yielding net finance income for the company for the first time in years. The feat has been accomplished through a financial management surgery that pumped in N516 billion in new money through a rights issue and paid off revenue sucking borrowings of over N374 billion.
Champion Breweries was yet to recover from a major profit drop in 2023, and its closing profit of N816 million in 2024 stood below previous highs. Suddenly, however, the company has returned an after-tax profit upturn of N984.6 million in the first quarter of 2025, already above the full year’s figure in 2024. It is a turnaround from a loss of almost N824 million in the same quarter last year.
As in other companies, there is an improved balance between sales and cost of sales, which created a high jump of 169 per cent in gross profit to almost N4 billion at the end of the first quarter. Moderated operating expenses changed the story from operating loss to profit, and also, the net foreign exchange loss that increased the loss in the first quarter of last year has dropped to zero so far this year.
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