July 29, 2025/Cordros Report
Nigerian Breweries Plc (NB) published their Q2-25 unaudited financials today. The results showed an earnings per share of NGN1.38, a sharp rebound from a loss per share of NGN3.21 in Q2-24. As a result, H1-25 EPS rose to NGN2.84, compared to a loss per share of NGN8.21 in H1-24. This performance was driven by strong topline growth (+40.8% y/y), improved operating margins, and significantly lower net finance costs (-93.1% y/y), reflecting FX gains and reduced borrowing expenses.
NB reported a 40.8% y/y increase in revenue for Q2-25 (H1-25: +53.9% y/y), supported by strong pricing and favourable mix improvements across their brand portfolio. Notably, Q2-25 revenue performance still reflects price actions implemented between H2-24 and Q1-25, compared to prices in Q2-24. According to management, Heineken recorded solid growth, supported by the rollout of its 45cl returnable bottle. Desperados and Legend Stout also recorded notable growth, with the stout portfolio now accounting for over 40.0% of the market. Meanwhile, in the non-alcoholic segment, Maltina was the key driver of growth. Nevertheless, revenue declined by 7.6% on a q/q basis, reflecting volume softness and price stability during the quarter.
Gross margin improved significantly, expanding by 984bps y/y to 40.7% in Q2-25 (H2-25: +885bps y/y to 42.1%), supported by topline expansion (+40.8% y/y) and slower cost of sales expansion (+20.8% y/y). This supported operating leverage, with EBITDA (+13.56ppts y/y) and EBIT (+13.68ppts y/y) margins rising to 23.9% and 18.8%, respectively, despite a 20.0% y/y increase in OPEX.
Further down, net finance cost declined by 93.1% y/y to NGN4.38 billion in Q2-25 (H1-25: -87.3% y/y), primarily due to a NGN7.50 billion FX gain (vs. FX loss of NGN39.43 billion in Q2-24) and a 48.9% y/y drop in finance costs.
Overall, NB recorded a profit before tax of NGN62.25 billion in Q2-25, a sharp reversal from the pre-tax loss of NGN50.76 billion in Q2-24. However, following a tax expense of NGN18.39 billion (vs. a tax credit of NGN17.65 billion in Q2-24), profit after tax settled at NGN43.86 billion—reversing the NGN33.11 billion loss recorded in Q2-24.
Management conference call on Thursday, 31 July 2025 at 01:00 PM: Click here to register.
Comment: NB’s Q2-25 results reflect strong execution across core performance areas, particularly effective pricing strategies and notable margin expansion. Despite q/q volume softness, the brewer sustained solid profitability, supported by a favourable product mix and improved operational efficiency. Looking ahead, despite continued pressure on disposable income and the seasonality associated with the third quarter, we believe NB remains well-positioned to sustain earnings through its premiumisation efforts, deeper market penetration, and improved affordability — driven by innovations such as the 45cl returnable bottle and expansion across key consumer segments. Thus, we expect continued cost discipline and a richer product mix to reinforce profitability in the near term. Our estimates are under review.
