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 ₦44.6 billion in its 2025 unaudited first quarter results, a 186 per cent rise from the ₦52.1 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.
BusinessDay reports that the recent stability of the naira against the U.S. dollars saw a sharp drop in FX-induced losses as it fell to ₦178 million in the first three months to March compared to ₦72.9 billion in the corresponding period last year.
But the naira has begun to reverse its gains, shedding about 5 per cent of its value against the U.S. dollars this month and fanning fears of a mixed outlook for fast-moving consumer goods (FMCG) firms which endured a combined ₦1.33 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 per cent increase in revenue, reaching ₦383.6 billion, primarily driven by better-than-expected volume growth, as highlighted by its parent company, Heineken. This is a notable rise from ₦222.17 billion reported in 2024 and ₦123.31 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 per cent compared to 82.9 per cent in Q1’24, resulted in a 7.4 points increase in gross margin to 43.4 per cent.
The company’s operational expenses (OPEX) increase was also relatively contained at 45.8 per cent, with advertising and sales expenses rising by 86.9 per cent, serving as the main notable pressure point. Hence, operating profit margin doubled to 22.2 per cent from 11.1 per cent in the first three months of 2024.
Net finance costs declined by 83.2 per cent to ₦15.3 billion, driven by a sharp reduction in FX losses. Finance income also increased by 86.6 per cent, 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 ₦66.1 billion and ₦10.3 billion respectively, outweighing the ₦16.8 billion inflow recorded from financing activities.
The operating cash outflow was primarily due to a ₦75.5 billion increase in receivables and a ₦68.9 billion reduction in payables. Overall cash position declined to ₦93.1 billion as against ₦150.6 billion in the same period last year.