Nigeria’s second-biggest beer maker posts N51 billion profit after seven years of loss-making

International Breweries, Nigeria’s second-biggest beer maker, is out of the woods at last as it reported its first annual profit since 2017 in the 2025 financial year.

The results signal profound relief for AB InBev, the Belgian majority owner, which had endured seven harrowing years of losses.

The company booked N50.9 billion in post-tax profit for 2025, relative to a net loss of N113.6 billion the previous year, its audited financial report issued on Friday stated.

International Breweries, which owns popular beer brands such as Budweiser, Trophy, Hero and Castle Lite, is worth N739.7 billion in assets, placing it next to Heineken-backed Nigerian Breweries among the country’s top beer manufacturers.

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Its share price rose by 9.9 per cent to N13.35 in Lagos after the news went public. It is its strongest daily gain since the start of the year.

Rough road to profitability

AB InBev, in 2016, completed the purchase of SAB Miller’s interest in International Breweries, consolidating it with the stake it already held in the brewer, which totalled 72.2 per cent at the time.

It proceeded to merge the entity with Intafact Beverages Limited and Pabod Breweries, two other companies where it held controlling stakes, the year after, hoping to unlock greater value from the broader economy of scale the consolidation would deliver.

The deal was central to the investor’s strategic push to gain a huge swathe of Africa’s brewery business, following a slowdown in its European and North American operations, and targeted Nigeria as one of the most promising beer markets on the continent.

International Breweries started reporting losses in 2018, when it posted negative earnings of N3.9 billion, driven by a 257.6 per cent surge in finance costs and the harmonisation of the accounts of the three entities that went through the business combination.

Setting up a greenfield plant as vast as the Sagamu-based Gateway plant, completed at an initial cost of $250 million, added further pressure to its financials, particularly in financing costs and debt levels.

Between 2019 and 2020, soaring operating costs and a flattish revenue growth lengthened the chain of losses.

Post-tax loss, at its peak, crossed N113 billion in 2024, following four years when foreign exchange losses from a dollar crunch and far-reaching currency reforms in Nigeria hammered earnings.

The winning factor that turned the tide last year, apart from an appreciable leap in revenue to N619 billion, was cutting back net foreign exchange loss to N13.7 billion from N165.7 billion.

Free float troubles

As of 2020, AB InBev had upped its shareholding to 87.3 per cent by virtue of a rights issue that raised N164.4 billion for the purpose of moderating the company’s debt level, which had been bloated by the cost of constructing the Gateway factory.

Proceeds from another rights issue in 2024 helped it deleverage its balance sheet dramatically, as the cash was used to pay down a balance of $379.9 million on a sticky loan obtained from Citibank six years earlier.

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AB InBev fully exercised its rights under the share sale, driving its shareholding further up to 96 per cent.

Allowing a single investor to own a stake that huge in a public company, to the extent that only 4 per cent of its issued shares are tradable in the open market, has been noted to make its shares hardly available to potential investors, consequently creating artificial scarcity.

The practice tends to fuel jumps in share price without justifiable fundamentals to support most of the gains the stock records over time.

The main board of the Nigerian Exchange (NGX), on which International Breweries is listed, requires that companies maintain a free float (the minimum number of shares that can be traded publicly) of 20 per cent or at least N40 billion worth of their shares.

In a January 2025 disclosure, the brewer said the NGX had extended the deadline it had given the brewer to remedy the shortcoming.