Nigerian Breweries rebounds with N99bn profit after two-year slump, slashes finance costs

NIGERIAN Breweries Plc has returned to profitability after two consecutive years of losses, posting a profit after tax of N99.1 billion in 2025, compared with a loss of N144.9 billion in 2024, as the brewer benefited from price adjustments, cost discipline and a sharp drop in finance expenses.

A review of the company’s 2025 audited financial statements on the Nigerian Exchange (NGX) shows that revenue rose by 35 percent to N1.47 trillion, from N1.08 trillion in 2024, reflecting both price increases and a gradual recovery in consumer demand despite inflationary pressure.

The company’s turnaround follows a difficult period in 2023 and 2024, when foreign exchange revaluation losses, rising borrowing costs and weak consumer purchasing power pushed earnings deep into negative territory.

Cost discipline drives margin recovery

While sales expanded strongly, Nigerian Breweries kept production costs relatively contained. Cost of sales increased by 19 percent to N902.24 billion, from N764.52 billion in the previous year, far slower than revenue growth, allowing the company to widen its gross margin.

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Operating profit improved sharply, rising to N205.19 billion from N69.9 billion in 2024, supported by tighter procurement controls and efficiency measures across its supply chain.\

Although selling, distribution and administrative expenses climbed to N364.14 billion from N254.05 billion, the increase was insufficient to offset the gains from revenue growth and cost management.

Finance cost collapse lifts bottom line

A key driver of the profit rebound was the 83 percent reduction in finance costs to N44.14 billion, from N252.81 billion in 2024. This reflects a combination of debt restructuring, lower foreign exchange losses and improved cash generation.

“With the sharp drop in interest and FX-related charges, the pressure on earnings eased significantly,” said Lagos-based company analyst Mr Sylvester Amao. “The company’s 2025 performance shows that operational efficiency and disciplined cost control can restore profitability even in a difficult macro environment.”

Balance sheet and cash flow strengthen

The brewer’s balance sheet also improved. Total assets stood at N1.07 trillion, while liabilities were N505.9 billion, giving the company a stronger equity base and improved solvency.

Net cash flow from operating activities rose to N228.18 billion, while investing and financing cash flows remained negative, reflecting continued capital expenditure and debt repayments. Despite this, Nigerian Breweries closed the year with cash and cash equivalents of N61.14 billion, providing a liquidity buffer.

Energy diversification to cut long-term costs

As part of its strategy to reduce energy costs and exposure to grid instability, Nigerian Breweries expanded its renewable energy footprint across its breweries in 2025.

At the Ibadan Brewery, the company expanded its solar photovoltaic (PV) system with a 2,500 kWp installation and a 2 MW/MWh Battery Energy Storage System (BESS), increasing the branch’s renewable electricity share from about 4 percent to 20 percent.

The Ama Brewery now operates one of the largest renewable energy systems among industrial manufacturers in Nigeria, following the installation of a 4 MWp hybrid solar PV plant with a 2 MW/MWh BESS in 2023.

Under a solar Power Purchase Agreement (PPA) with Daystar Power Energy, a 4.2 MWp solar PV system with a 2 MW/MWh BESS was completed for the Lagos Brewery and head office in December 2024 and became fully operational in the second quarter (Q2) of 2025, supplying up to 20 percent of their electricity needs.

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In Aba, a 3.7 MWp solar PV system with a 2 MW/MWh BESS was commissioned in June 2025, also expected to supply up to 20 percent of the brewery’s power demand.

Hydropower and biogas projects

The company is also collaborating with Konexa on a 30 MWp hydropower project designed to supply 100 percent renewable electricity for the Kaduna Brewery, with operations targeted before the end of 2025.

Chair of the Board of Directors, Juliet Anammah, said the brewer had also invested in biogas systems to reduce thermal energy costs.

“Following the commissioning of HEINEKEN AME region’s first dedicated 2 MW biogas boiler at Ama Brewery in October 2024, we have deployed a second biogas boiler at Ibadan Brewery. These systems enable full utilisation of biogas generated from wastewater treatment and now supply over 10 percent of the thermal energy required for brewing operations,” she said.

Outlook

While the company’s 2025 rebound marks a major turnaround, analysts say sustainability will depend on managing inflation, foreign exchange exposure and consumer affordability, as well as maintaining strict cost discipline.

For now, Nigerian Breweries has demonstrated that operational restructuring and energy diversification can restore profitability even in Nigeria’s challenging business climate.