NB Defies Weak Demand, Delivers 25.6% Profit Growth in Q1

Nigerian Breweries Plc (NB) has delivered a resilient first-quarter performance for 2026, posting a 25.6 per cent year-on-year increase in earnings per share (EPS) to ₦1.80, despite a challenging consumer environment and muted revenue expansion.
The brewer’s unaudited financial results released on April 23 show that earnings growth was largely underpinned by modest revenue gains, disciplined cost management, and a sharp decline in net finance costs.
Revenue rose by 7.7 per cent year-on-year in Q1 2026, a significant slowdown from the 68.9 per cent growth recorded in the corresponding period of 2025. The softer top-line performance reflects constrained consumer spending and high product price sensitivity, which limited pricing power and weighed on volume growth. On a quarter-on-quarter basis, revenue dipped by 1.9 per cent, underscoring persistent demand pressures in Nigeria’s consumer goods sector.
Despite the sluggish revenue momentum, NB managed to slightly improve its cost efficiency. Cost of sales grew by 7.4 per cent year-on-year—slightly below revenue growth—resulting in a marginal expansion of gross margin to 43.5 per cent from 43.4 per cent in Q1 2025. The contained cost profile was driven by relatively moderate increases in raw materials and consumables, which rose by 5.0 per cent year-on-year. Every quarter, the cost of sales declined sharply by 14.0 per cent, reflecting ongoing cost optimisation initiatives.
However, operating performance showed signs of strain. Operating leverage weakened during the period, as rising operating expenses outpaced revenue growth. Earnings before interest and tax (EBIT) margin declined by 107 basis points to 21.2 per cent, while EBITDA margin slipped by 23 basis points to 26.2 per cent.

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The pressure on margins was largely attributed to a 12.3 per cent year-on-year increase in operating expenses, driven by aggressive marketing and distribution spending. Advertising and sales expenses surged by 30.0 per cent to ₦35.68 billion, accounting for 39.0 per cent of total operating costs, as NB intensified efforts to defend its market share and deepen product penetration in a highly competitive landscape.
A major highlight of the quarter was the significant improvement in the company’s financing position. Net finance costs declined sharply by 54.5 per cent year-on-year to ₦6.95 billion, compared to ₦15.27 billion in Q1 2025. This was driven by a remarkable 403.3 per cent surge in finance income and a 46.1 per cent reduction in finance costs, reflecting improved cash management, better yields on financial assets, and easing funding pressures.
As a result, profit before tax rose by 14.9 per cent year-on-year to ₦80.41 billion, while profit after tax climbed by 25.6 per cent to ₦55.95 billion. Profitability was further supported by a decline in the effective tax rate to 30.4 per cent from 36.3 per cent in the prior year.
Outlook:
While Nigerian Breweries Plc has demonstrated resilience in navigating cost pressures and financing challenges, the outlook remains closely tied to consumer demand recovery. Analysts expect future revenue growth to be largely volume-driven, as pricing flexibility remains constrained in the current economic climate.
Earnings are likely to benefit from continued cost optimisation, relative foreign exchange stability, and gradual macroeconomic improvement. However, sustained pressure on operating margins could persist if elevated marketing and distribution costs continue in the bid to retain market leadership.
Overall, NB’s Q1 2026 performance highlights a careful balancing act between defending market share and preserving profitability in a still-fragile consumer market.
Nigerian Breweries Plc reports 25.6% EPS growth in Q1 2026, driven by lower finance costs and cost control despite weak consumer demand.