April 28, 2025/Cordros Report

International Breweries Plc (INTBREW) published their Q1-25 unaudited results this morning, reporting an earnings per share of NGN0.30 in Q1-25 (vs loss per share of NGN0.62 in Q1-24), marking the brewer’s first positive quarterly EPS since Q1-22 (NGN0.03). The return to profitability was driven by robust revenue growth (+68.2% y/y), and lower FX loss (-99.3% y/y).  

Revenue grew strongly by 68.2% y/y (Q1-24: +89.7% y/y) in Q1-25, supported by improved cost-reflective pricing and effective revenue management initiatives such as promotional activities to drive sales volume and improve customer retention. Findings from our channel checks revealed that the brewer took price increases of c. 35.5% y/y in the period. On a quarter-on-quarter basis, revenue grew by 19.3%. 

Gross margin recovered strongly, expanding by 639bps y/y to 34.3% in Q1-25 (Q1-24: 28.0%), as the brewer’s robust revenue growth outpaced the rise in cost of sales (+53.3% y/y), which was primarily driven by a 57.0% y/y increase in raw materials and overhead costs. 

Reflecting the stronger topline and significantly lower FX losses (-99.3% y/y), INTBREW recorded an operating profit of NGN31.53 billion in Q1-25, compared to an operating loss of NGN80.58 billion in Q1-24. Consequently, the brewer’s EBITDA and EBIT margins printed 27.0% and 18.2%, respectively. 

In addition, INTBREW posted a net finance income of NGN3.53 billion (vs. a net finance cost of NGN8.78 billion in Q1-24), driven by a 538.4% y/y increase in finance income alongside a 79.7% y/y decline in finance costs.    

In conclusion, INTBREW recorded a profit before tax of NGN35.07 billion (vs pre-tax loss of NGN89.35 billion in Q1-24). Eventually, profit after tax printed NGN29.38 billion (vs loss after tax of NGN60.39 billion in Q1-24) after accounting for a tax charge of NGN5.69 billion (vs tax credit of NGN28.96 billion in Q1-24). 

Comment: INTBREW’s Q1-25 results reflect a strong recovery, underpinned by solid revenue growth, margin expansion, and improved profitability. Additionally, the proceeds from the 2024FY rights issue, alongside a more stable FX environment, helped offset the company’s foreign currency debt and supported the return to positive earnings. Overall, while Q1-25 lays a solid foundation for a more sustainable earnings path, maintaining profitability will depend on the brewer’s ability to navigate persistent cost pressures amid a still challenging macroeconomic environment. Our estimates are under review.