July 29, 2025/Cordros Report
International Breweries Plc (INTBREW) published their Q2-25 unaudited results after market close yesterday (28 July), reporting earnings per share of NGN0.07 in Q2-25 (vs loss per share of NGN1.76 in Q2-24), translating to an earnings per share of NGN0.25 in H1-25 (vs loss per share of NGN3.98 in H1-24). The brewer’s performance was significantly boosted by a strong revenue growth (+39.5% y/y), a sharp decline in realised FX loss (-22.9x y/y) and higher finance income (+116.5% y/y).
INTBREW recorded a 39.5% y/y (H1-25: +52.8% y/y) in Q2-25. We believe the topline expansion in the period was mainly driven by pricing gains, continued route-to-market optimisation, product innovation, and brand repositioning initiatives. Meanwhile, revenue declined by 3.6% on a quarter-on-quarter basis, indicating volume softness and normalisation post-price hikes.
Gross margin improved significantly in Q2-25, expanding by 888bps y/y to 37.0%, supported by strong revenue growth (+39.5% y/y) and reduced exposure to FX-sensitive inputs, as localisation efforts helped contain raw material cost pressures (+16.6% y/y | Q2-24: +96.5% y/y).
Reflecting the improved cost environment and topline growth, INTBREW also posted positive EBIT and EBITDA margins in Q2-25, reversing the negative print recorded in Q2-24. Specifically, EBIT and EBITDA margins stood at 14.7% and 24.3%, respectively in Q2-25, supported by stronger gross profit, reduced FX loss (-22.9x y/y) and a lower OPEX-to-sales ratio (-371bps y/y to 19.0%). We believe the shift to CNG-powered operations and logistics supported this improved efficiency by reducing energy and distribution cost intensity.
The brewer recorded a net finance income of NGN1.94 billion in Q2-25 (vs. a net finance cost of NGN21.91 billion in Q2-24), primarily driven by a substantial rise in finance income (+116.5% y/y) amid a 91.8% y/y decline in finance costs.
Overall, INTBREW posted a profit before tax of NGN26.46 billion in Q2-25 (vs. pre-tax loss of NGN61.81 billion in Q2-24). Eventually, profit after tax settled at NGN11.91 billion in the quarter (vs. loss after tax of NGN47.32 billion in Q2-24). Effective tax rate in the quarter was 55.0% (Q2-24: 23.4%).
Comment: INTBREW’s Q2-25 performance reflects a strong rebound, underpinned by improved operational efficiency, successful brand repositioning, and significantly lower FX-related pressures. The return to profitability also highlights the impact of their strategic shift towards cost optimisation, including energy transition and localisation of inputs. Although topline contracted modestly on a sequential basis—likely reflecting price elasticity—the brewer’s H1 showing points to solid execution. Going forward, believe sustained margin recovery, disciplined cost management, and a gradual rebound in volumes will be critical to preserving earnings momentum, especially as elevated consumer price sensitivity limits pricing flexibility. Our estimates are under review.
