Nigeria: International Breweries returns to profitability for the first time in seven years

International Breweries, the Nigerian subsidiary of AB InBev, has returned to profitability for the first time in seven years, posting a N57.8 billion profit after tax in the first nine months of 2025, a significant turnaround from a N112.8 billion loss in the same period last year, Businessamlive reported on October 28.

The brewer’s recovery, one of the sharpest in Nigeria’s consumer sector this year, reflects a rare blend of pricing discipline, operating efficiency, and foreign exchange gains, after years of margin erosion and currency turmoil that had battered its balance sheet.

Revenue jumped 38 per cent year-on-year to N472.6 billion, buoyed by resilient demand for its mainstream beer brands, improved pricing, and a rebound in consumer spending. Cost of sales rose by a slower 25 per cent to N311.6 billion, helping lift gross profit to N160.9 billion from N94.9 billion a year earlier.

While administrative and marketing costs climbed 27 per cent to N92.1 billion, reflecting inflationary pressures, rising logistics costs, and aggressive promotional campaigns, the brewer still managed to post an operating profit of N67 billion, a reversal from the N125.4 billion operating loss reported in 2024.

A key factor behind the turnaround was the collapse in other expenses which fell from N147.6 billion to just N1.8 billion, thanks largely to N8.7 billion in unrealised foreign exchange gains and a decline in realised FX losses, which had ballooned to N159 billion last year when Nigeria’s naira plunged following currency liberalisation.

Finance costs also dropped to N6.1 billion from N37.1 billion as the company eliminated major bank borrowings, while finance income rose to N13.3 billion, driven by improved returns on cash investments and tighter treasury management. The result was a N7.2 billion net finance income, compared to a N29.1 billion net finance loss a year earlier.

These combined effects lifted pre-tax profit to N74.2 billion, reversing the previous year’s N154.6 billion loss. After a N16.4 billion tax charge, the brewer recorded a N57.8 billion net profit, yielding a 12 per cent net margin, the company’s strongest since before Nigeria’s 2016 recession.

Earnings per share turned positive at N0.34, compared with a N0.67 loss per share in the same period last year, marking a notable psychological boost for long-term investors who had weathered years of write-downs.

International Breweries generated N38.4 billion in operating cash flow, reversing a N10.9 billion outflow in 2024, a sign of healthier working capital management and improved inventory turnover. Capital expenditure, however, rose to N86 billion, reflecting continued investment in capacity expansion, energy efficiency, and automation at its Sagamu and Ilesa plants.

Despite these heavy outlays, net cash outflow from financing activities narrowed to N13.7 billion as interest and lease payments eased following debt repayments in late 2024.