Nigerian Breweries quarterly profit up 26% on higher revenue, lower finance costs

Nigerian Breweries, the local unit of the world’s second biggest brewer Heineken, logged a 25.6 per cent rise in first-quarter earnings on Thursday, relative to the corresponding period of last year.

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A passably strong growth in revenue and a sharp slide in finance costs drove performance.

Those factors helped take post-tax profit to N55.9 billion from N44.6 billion, and assisted the company to continue to coast along the path of recovery that began in 2025, after the two preceding years when it recorded heavy losses.

Heineken, the Amsterdam-based parent, on Thursday flagged a demand risk to its beers this year, foreseeing that mounting uncertainties around energy costs and inflation on account of the ongoing Middle East conflict could hammer operations.

Revenue for the beer-maker expanded 7.7 per cent to N413 billion on strong sales by big brands led by Heineken lager, which not long ago introduced a 45-centilitre bottle to the market.

Legend, its stout brand, has recorded historic success lately in recruiting more consumers, enabling it to grow 20 per cent last year. It is now “at parity with the number one brand in stout,” CEO Thibaut Boidin told a pre-AGM media parley in Lagos last week.

Finance costs fell 46.1 per cent to N8.3 billion, easing pressures on pre-tax profit, while finance income surged more than fivefold to N1.3 billion

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Nigerian Breweries booked no loss on foreign exchange transactions in the review period, contrary to what played out a year ago, when a N178 million loss was recorded.

The manufacturer, which also produces malt drinks, whiskey and spirits, has been sharply deleveraging its balance sheet, meaning foreign currency debts are now zero after offsetting FX-denominated borrowings with the proceeds of its 2024 rights issue.

Profit before tax stood at N80.4 billion, up from N70 billion, while total assets climbed to N1.1 trillion by 6.7 per cent.

“In view of the Middle East crisis, the company has also intensified focus on risk management by reviewing downside scenarios and implementing mitigations across key exposures to protect performance and preserve financial flexibility,” the company said in a statement.

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Dividend payment is currently on hold as the company is deterred by a rule from the Companies and Allied Matters Act 2020 that prohibits companies with negative retained earnings from distributing cash rewards to shareholders.

The retained earnings of Nigerian Breweries are currently in the red at –N16.2 billion.

Apart from its core alcoholic and non-alcoholic manufacturing operations, the company runs an ancillary business, involving the production of bottles, cans, crown corks, labels, cartons, and plastic crates.