Nigerian Breweries Posts NGN144.88 Billion Loss in 2024FY as Cost Pressures and FX Challenges Persist on NGX

The Managing Director, of the Nigerian Breweries plc, Mr. Hans Essadi, 

On Friday, February 14, 2025, Nigerian Breweries Plc (NB) released its 2024 full-year (FY) audited results on the Nigerian Exchange Limited (NGX), revealing a loss per share of NGN12.07—a slight improvement from NGN12.80 in 2023FY. However, the company continued to battle sustained cost pressures (+97.5% year-on-year) and foreign exchange losses (+2.8% year-on-year), which significantly weakened its financial performance.

Despite these challenges, NB recorded an 80.8% year-on-year revenue growth in 2024FY—a sharp increase compared to the 8.9% growth in 2023FY. This surge was driven by significant price hikes to counter inflationary pressures and currency weakness, alongside volume growth fueled by heightened consumer spending during year-end celebrations. Sequentially, net revenue grew by 65.2% quarter-on-quarter, reflecting strong sales in the final months of the year.

However, cost inflation eroded profitability, as gross margin declined by 596 basis points (bps) to 29.4% in 2024FY, compared to 35.5% in 2023FY. The cost of sales increased by 97.5% year-on-year, surpassing revenue growth at 80.8% year-on-year, mainly due to a 118.0% rise in raw material and consumables expenses.

This led to a contraction in Earnings Before Interest and Tax (EBIT) and Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) margins, which dropped to 6.4% (-89bps) and 11.5% (-379bps), respectively. Further pressure came from a 46.1% rise in operating expenses, coupled with an alarming 762.6% surge in net release of expected credit loss on financial assets, totaling NGN4.05 billion.

Finance Costs and FX Impact

NB’s net finance charges surged by 33.6% year-on-year to NGN252.81 billion, primarily driven by a 173.5% rise in finance costs. The increased financing burden stemmed from higher interest expenses on loans and borrowings, which jumped by 179.5% year-on-year.

However, the final quarter of 2024 provided some relief, as NB reported an FX gain of NGN2.89 billion in Q4-2024, compared to a massive FX loss of NGN66.51 billion in Q4-2023, supported by the naira’s appreciation in Q4.

Despite this, NB ended 2024FY with a pre-tax loss of NGN182.92 billion, surpassing the NGN145.22 billion pre-tax loss in 2023FY. A tax credit of NGN38.03 billion helped cushion the blow, bringing loss after tax to NGN144.88 billion, compared to NGN106.31 billion in 2023FY.

The Brewing Industry’s Battle with Inflation & FX Volatility

NB’s performance reflects broader struggles within Nigeria’s brewing industry, where companies face spiraling production costs, exchange rate instability, and declining consumer purchasing power. Competitors like Guinness Nigeria and International Breweries Plc have also reported significant financial strain, navigating a similar landscape of economic uncertainty.

Outlook for 2025

Looking ahead, NB is expected to continue leveraging price adjustments and volume expansion to drive revenue growth. However, lingering cost pressures and elevated finance costs remain critical challenges to profitability. The company’s ability to navigate macroeconomic headwinds, optimize operational efficiency, and manage its debt burden will be pivotal in determining its financial trajectory in 2025.

As Nigeria’s economic environment remains volatile, investors and industry stakeholders will closely monitor NB’s strategies for cost containment and revenue sustainability.

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