Nigerian Breweries Plc (“NB” or “the Group”) delivered a strong recovery in earnings for the nine months ended 30 September 2025, posting a Profit After Tax (PAT) of ₦85.5 billion, a dramatic rebound from a ₦149.5 billion loss in the same period of 2024. The turnaround was driven by robust revenue growth (+47% YoY), improved cost efficiency, and a sharp decline in net finance cost following the successful ₦600 billion Rights Issue completed in 2024, which strengthened the balance sheet and reduced leverage.

Despite inflationary pressures and weak consumer spending, the company maintained its market leadership through premiumization, pricing discipline, and enhanced route-to-market execution. A one-off ₦6.08 billion impairment charge relating to the integration of Distell Wines & Spirits Nigeria Ltd weighed on Q3 results, resulting in a quarterly net loss of ₦2.9 billion, but the full-year outlook remains positive.

Financial Highlights

₦’ million | Q3 2025 | Q3 2024 | % Δ YoY | 9M 2025 | 9M 2024 |% Δ YoY

Revenue | 308,238 | 231,104 | +33% | 1,046,382 | 710,872 | +47%

Cost of Sales | (204,086) | (180,876) | +13% | (631,230) (500,959) | +26%

Gross Profit | 104,152 | 50,229 | +107% | 415,152 | 209,912 | +98%

Operating Expenses | (93,980) | (59,962) | +57% | (253,429) | (180,862) | +40%

Operating Profit | 11,232 | (9,094) | +223.51% | 163,129 | 29,045 | +462% |

Net Finance Cost | (14,003) | (77,564) | –82% | (33,656) | (232,045) | –85%

Profit Before Tax | (2,772) | (86,659) | –97% | 129,473 | (202,999) | +163%

Profit After Tax | (2,911) | (64,301) | –95% | 85,507 | (149,501) | +157%

EPS (kobo) | (9) | (628) | –98% | 275 | (1,455) | +119%

Analyst Commentary

1. Strong Revenue Momentum

The company delivered robust topline growth across both quarterly and 9M periods.
Revenue rose 33% YoY in Q3 2025 and 47% YoY for 9M 2025, driven by strong market demand, product diversification, and improved production capacity.
This growth demonstrates market share expansion and effective pricing strategies despite broader macroeconomic headwinds.

2. Improved Cost Efficiency

Cost of Sales increased 13% YoY in Q3 and 26% YoY YTD — significantly below revenue growth.
This supported a 98% surge in Gross Profit to ₦415.2 billion for 9M 2025, expanding the gross margin to 39.7% (vs. 29.5% in 9M 2024).
Efficiency gains likely reflect economies of scale, better yield management, and operational cost optimization.

3. Operating Profit Turnaround

Operating Profit improved 462% YoY to ₦163.1 billion, compared to ₦29.0 billion in 9M 2024.
Q3 2025 also recorded a positive ₦11.2 billion Operating Profit, reversing a ₦9.1 billion loss in Q3 2024.
This reflects disciplined expense control and stronger revenue absorption of fixed costs.

4. Financial Leverage Decline

Net finance cost dropped 85% YoY, from ₦232.0 billion to ₦33.7 billion — indicating lower borrowing costs, debt restructuring, or FX gains.
This contributed significantly to the recovery in pre-tax profitability.

5. Return to Profitability

The company achieved ₦129.5 billion Profit Before Tax (vs. a ₦203.0 billion loss last year), marking a full turnaround.
Net profit came in at ₦85.5 billion, reversing the ₦149.5 billion loss in 9M 2024.
Earnings per share surged to ₦2.75 (from a ₦14.55 loss per share), reflecting a 119% improvement YoY.

6. Margin Analysis

Metric | 9M 2025 | 9M 2024 | Change

Gross Margin | 39.7% | 29.5% | +10.2ppt

Operating Margin | 15.6% | 4.1% | +11.5ppt

Net Margin | 8.2% | (21.0%) | +29.2ppt

Margins demonstrate clear efficiency gains across the value chain.

Balance Sheet Highlights

₦’ million | Sep 2025 | Dec 2024 | % Δ

Total Assets | 1,110,622 | 1,138,276 | –2.4%

Total Equity | 546,581 | 463,032 | +18%

Total Liabilities | 564,041 | 674,332 | –16%

Cash & Cash Equivalents | 69,247 | 150,588 | –54%

Loans & Borrowings | 162,173 | 209,050 | –22%

Retained Earnings | (85,568) | (169,800) | +49.6%

Financial Position Analysis

1. Stronger Balance Sheet Despite Slight Asset Contraction

Total Assets stood at ₦1.11 trillion as of September 2025, a 2.4% decline from ₦1.14 trillion at FY 2024.
The minor contraction reflects reduced cash holdings and working capital adjustments, despite notable improvements in profitability and equity strength.
The company continues to maintain a robust asset base, providing significant leverage for future expansion.

2. Equity Growth Driven by Profit Recovery

Total Equity rose by 18% to ₦546.6 billion (Dec 2024: ₦463.0 billion), primarily reflecting:

· Improved earnings retention,

· Reduced accumulated losses, and

· A 49.6% improvement in retained earnings to a deficit of ₦85.6 billion (from ₦169.8 billion).

This underscores a strong recovery in shareholders’ value and improving solvency ratios.

3. Deleveraging and Balance Sheet Optimization

Total Liabilities declined 16% YoY to ₦564.0 billion, driven by a 22% reduction in loans and borrowings.
The decline in interest-bearing debt aligns with management’s strategy to optimize capital structure and reduce finance costs, which fell 85% year-on-year.
This deleveraging enhances balance sheet flexibility and positions the company for more efficient capital deployment going forward.

4. Lower Cash Position Reflects Active Reinvestment

Cash and cash equivalents fell 54% to ₦69.2 billion, from ₦150.6 billion in December 2024.
The decline likely reflects debt repayments, capital expenditure commitments, and working capital absorption linked to business expansion and operational scaling.
Despite the decline, liquidity remains adequate to support near-term obligations given the improved profitability and reduced leverage.

5. Improved Solvency and Leverage Ratios

Metric | Sep 2025 | Dec 2024 | Direction

Debt-to-Equity Ratio | 0.30x | 0.45x |

Equity Ratio | 49.2% | 40.7%

Net Debt / Equity | 0.17x | 0.13x

Retained Earnings Growth | +49.6% | -

These metrics confirm improving capital structure resilience, underpinned by rising equity capital and lower leverage levels.

6. Overall Balance Sheet Summary

The company’s balance sheet demonstrates a clear turnaround story — profitability recovery is translating into capital strength and reduced indebtedness.
The combination of higher retained earnings, lower borrowings, and reduced finance costs points to a business entering a sustainable growth phase with improved financial health.
The focus ahead should be on rebuilding liquidity, optimizing working capital, and sustaining earnings momentum to fully restore shareholder equity.

Comment: The improvement in retained earnings and reduction in borrowings reflect NB’s post-rights-issue deleveraging and recovery in profitability. The company’s net debt-to-equity ratio fell sharply to 0.30x (vs 0.45x in FY2024).

Operational & Strategic Highlights

Revenue Growth: NB achieved strong top-line growth of +47% YoY, supported by premiumisation, selective price adjustments, and improved product mix.
Cost Discipline: Cost of sales grew slower than revenue (+26% vs +47%), reflecting improved supply chain efficiency and stable input sourcing.
Margin Expansion: Gross margin expanded +7.3 percentage points YoY to 39.7%, while operating margin improved from 4.1% to 15.6%.
Finance Cost Efficiency: Finance costs fell by 46% YoY to ₦39.2 billion, following debt repayment and lower FX-related losses.
Distell Integration: The acquisition of Distell Wines & Spirits Nigeria (finalized in 2024) added depth to NB’s portfolio, though a one-off ₦6.1 billion impairment was recognized in Q3 2025.
Earnings Recovery: The company swung from a ₦149.5 billion loss in 9M 2024 to ₦85.5 billion profit in 9M 2025 — a ₦235 billion turnaround.

Key Ratios

Metric | 9M 2025 | 9M 2024 | Change

Gross Margin | 39.7% | 29.5% | +10.2pp

Operating Margin | 15.6% | 4.1% | +11.5pp

PBT Margin | 12.4% | (28.6%) | +41pp

PAT Margin | 8.2% | (21.0%) | +29.2pp

ROE (annualized) | 20.9% | (32.3%) | +53.2pp

Net Debt/Equity | 0.30x | 0.45x | –0.15x

1. Profitability Ratios — Strong Margin Recovery

Gross Margin expanded 10.2 percentage points year-on-year to 39.7%, driven by:
- Improved cost discipline and sourcing efficiencies,
- Higher average selling prices, and
- Favourable product mix within the portfolio.
Operating Margin improved sharply to 15.6% (vs. 4.1% in 9M 2024), reflecting operational leverage from higher volumes and tighter control over administrative and distribution expenses.

2. Earnings Momentum — Return to Robust Profitability

Profit Before Tax Margin improved significantly to 12.4%, rebounding from a loss position of 28.6% a year earlier.
- The turnaround was primarily supported by higher gross profit and an 85% reduction in finance costs, following debt optimization.
Profit After Tax Margin strengthened to 8.2%, underscoring the company’s renewed profitability and effective cost management strategies.

3. Return Ratios — Equity Efficiency Rebound

Return on Equity (ROE) surged to 20.9%, up 53.2 percentage points from a negative 32.3% in 9M 2024.
- This indicates that management has successfully converted higher earnings into tangible value creation for shareholders.
- The recovery in retained earnings further confirms improving capital efficiency and sustainability of returns.

4. Leverage — Strengthened Capital Structure

Net Debt-to-Equity Ratio declined from 0.45x to 0.30x, highlighting ongoing deleveraging efforts and prudent balance sheet management.
- Reduced borrowings and stronger earnings improved the company’s debt-servicing capacity, leading to lower finance expenses and stronger solvency metrics.
- The firm now has greater headroom for growth financing without compromising capital stability.

5. Overall Ratio Outlook

The company’s ratio performance reflects a comprehensive financial turnaround, characterized by:
- Higher profitability margins,
- Efficient capital utilization, and
- A leaner, more resilient balance sheet.
If sustained, these metrics place the firm on track for sustained double-digit ROE, a solid margin structure, and enhanced shareholder returns in FY2026.

Outlook

With strengthened balance sheet metrics, improved cost structure, and declining finance costs, the company appears well-positioned for sustainable profitability in FY2025. Focus areas going forward include:

Scaling local raw material sourcing to mitigate FX risks,
Continued debt optimization, and
Expansion into higher-margin segments for long-term value creation.

Outlook (Q4 2025 & FY2025E)

Seasonal boost expected: The fourth quarter typically drives the bulk of annual sales due to festive demand; management expects revenue momentum to continue.
Full-year profit guidance: FY2025 PAT is projected to close around ₦110–₦120 billion, reflecting seasonal uptick and improved cost efficiency.
FX and input cost risks remain: Continued naira weakness and imported raw material dependence pose moderate risks to margins.
Balance sheet resilience: With a stronger equity base and lower leverage, NB is better positioned to withstand market volatility.

Strength

· Revenue recovery and margin expansion

· Rights Issue recapitalization reduced finance burden

· Strong brand portfolio and distribution leadership

· Positive Q4 seasonal outlook

· Attractive valuation vs peers

Risks

Rising inflation and reduced consumer disposable income
FX volatility and imported input exposure
Competitive pricing pressure from other brewers
Regulatory taxes on alcoholic beverages

Analyst View

Nigerian Breweries has delivered one of the strongest earnings recoveries in the consumer goods sector this year, validating management’s turnaround strategy and the positive impact of the 2024 Rights Issue. The combination of premium product growth, pricing resilience, and improved financial leverage supports a sustained recovery path.

Conclusion

Nigerian Breweries’ Q3 and 9M 2025 results mark a decisive return to profitability. With improved margins, reduced leverage, and an expanding premium portfolio, the company is well-positioned to sustain growth momentum into FY2026.

Q3 & 9M 2025 Earnings Report — Strong Recovery as Profit Rebounds to ₦85.5bn; Margin Expansion and Lower Finance Cost Drive Bottom-Line Grow

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