Nigerian Breweries Plc has delivered a remarkable turnaround in H1 2025, swinging from a ₦85.2 billion loss in H1 2024 to an ₦88.4 billion profit. This performance reflects a combination of strong revenue growth, disciplined cost management, and sharply lower finance costs, positioning the company for a more stable and profitable future despite lingering macroeconomic pressures.
Key Strengths
- Revenue Growth: Revenue rose 54% YoY to ₦738.1 billion, driven by price adjustments and resilient consumer demand across key product lines.
- Margin Expansion: Gross profit nearly doubled (+95%) while operating profit surged 298%, showing the impact of better cost control and operating leverage.
- Cost Discipline: Although operating expenses rose 29%, this was lower than the 54% increase in revenue, indicating better cost efficiency.
- Finance Cost Reduction: Net finance expense dropped by 87%, a key contributor to the return to profitability.
- Strong Bottom Line: Profit after tax stood at ₦88.4 billion, reversing the prior year’s significant loss.
- Earnings Per Share: EPS rose from a loss of 828 kobo to a gain of 285 kobo, reinforcing improved shareholder value creation.
Key Weaknesses
- Decline in Other Income: Other income dropped 44%, suggesting limited one-off gains or reduced ancillary income streams.
- Still High Cost Base: Operating expenses (₦160.6 billion) remain a material drag on margins and will need close monitoring, especially in a volatile FX and inflationary environment.
- Tax Drag: The company incurred ₦43.8 billion in income tax expense versus a tax credit last year, limiting net profit growth, though it reflects a return to taxable profitability.
Outlook
The company’s financial rebound is a strong signal of resilience and operational execution, especially amid macroeconomic instability. With improved cost management, lower interest burden, and increased scale, Nigerian Breweries appears well-positioned to sustain its recovery and restore investor confidence.
How well do narratives help inform your perspective?
Disclaimer
The user WaneInvestmentHouse holds no position in NGSE:NB. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.