April 17, 2025/Cordros Report
Nigerian Breweries Plc (NB) published their Q1-25 unaudited financials this morning reporting an earnings per share of NGN1.43 (Q1-24: loss per share of NGN5.07) in the period. The positive outturn in earnings was driven by the strong topline growth (+68.9% y/y) in the period.
NB reported a 68.9% y/y increase in revenue for Q1-25 (Q1-24: +84.2% y/y). Management attributed the robust topline performance to higher pricing, continuous innovation and a favourable product mix. Notably, the premium beer segment recorded strong performance, with standout contributions from Legend Stout, Desperados, and Heineken.
Remarkably, gross margin rebounded, rising by 737bps y/y to 43.4% in Q1-25 (Q1-24: 36.1%), driven by strong revenue growth (+68.9% y/y), despite a 49.5% y/y increase in cost of sales. This supported significant improvements in EBITDA (+979bps y/y) and EBIT (+11.10ppts y/y) margins to 26.4% and 22.2%, respectively, amid a 45.8% y/y increase in OPEX.
As anticipated, net finance costs fell sharply by 83.2% y/y to NGN15.27 billion (Q1-24: NGN90.85 billion), mainly due to a 99.8% y/y drop in FX losses.
Overall, NB reported a profit before tax of NGN69.99 billion in Q1-25, a sharp recovery from the NGN65.58 billion loss posted in Q1-24. After accounting for a tax expense of NGN24.73 billion, NB reported a profit after tax of NGN44.55 billion (vs loss after tax of NGN52.09 billion in Q1-24).
Comment: Unsurprisingly, NB sustained the strong momentum from Q4-24 into Q1-25, underscoring the combined impact of strong revenue generation, alongside the gains from recovery and process optimisation efforts implemented in 2024FY. The brewer’s performance was supported by reduced FX liabilities through the proceeds from the 2024 Rights Issue and a stable exchange rate during the period. Looking ahead, with the integration of Distell and a continued focus on operational efficiency, we believe NB is well-positioned to sustain revenue growth and deliver improved earnings in 2025FY. Our estimates are currently under review.
