Nigerian Breweries Returned to Profitability in Q1-2025
Nigerian Breweries Plc grew net profit to N44.6 billion in the first quarter of 2025, marking a strong recovery from a net loss of N52.1 billion in the equivalent period in 2024.
This strong bottom line pushed up was informed by the company’s strong revenue growth, reduced cost pressures, and a sharp decline in foreign exchange losses in the first three month in the year,
Its unaudited financial statement showed that Nigerian Breweries recorded a robust 68.9% year on year increase in revenue, reaching N383.6 billion, primarily driven by better-than-expected volume growth, as highlighted by its parent company, Heineken.
This strong revenue performance, alongside a more moderate increase in cost of sales, resulted in a 7.4ppts increase in gross margin to 43.4%.
Compared with higher revenue surge, costs of sales climbed by 49.5% year on year to N217.068 billion from N145.241 billion in the comparable period in 2023.
OPEX increase was also relatively contained at 45.8% year uptrend, vs revenue outturn, with advertising and sales expenses as the main notable pressure point. Consequently, operating profit margin doubled to 22.2% from 11.1% in Q1’24, according to analysts.
Further review showed that Nigerian Breweries net finance costs declined by 83.2% year on year to N15.27 billion, from N90.85 billion in Q1-2024 – driven by a sharp reduction in FX losses.
In the period, fx losses fell to N178.0 million from N72.9 billion 12 months earlier. Finance income also increased by 86.6%, further supporting bottom-line growth.
Overall, profit before tax closed at N70.0 billion, reversing a loss of N65.6 billion in Q1-2024. Nigerian Breweries closed first quarter of operating with N44.6 billion after tax profit.
Analysts at Cordros Capital Limited said the earnings performance underscored combined impact of strong revenue generation, alongside the gains from recovery and process optimisation efforts implemented in 2024.
“The brewer’s performance was supported by reduced FX liabilities through the proceeds from the 2024 Rights Issue and a stable exchange rate during the period”.
Meanwhile, investment firm CardinalStone Limited said despite the strong top line performance, the company’s cash position weakened during the period.
“This deterioration was driven by negative cash flows from both operating (–N66.1 billion) and investing (–N10.3 billion) activities, which outweighed the N16.8 billion inflow recorded from financing activities”, analysts said.
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 from N150.6 billion prior year. #Nigerian Breweries Returned to Profitability in Q1-2025#
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