After years of sustained losses, International Breweries Plc has staged a notable financial turnaround, reporting its first profit in seven years for the 2025 financial year. The recovery was driven by strong revenue growth and a more stable exchange rate environment, according to its audited results filed with the Nigerian Exchange Group (NGX).
The brewer, majority-owned by Anheuser-Busch InBev, posted a net profit of N51 billion for the year ended December 2025, a sharp reversal from the N113.6 billion loss recorded in 2024.
FX Stability Drives Turnaround
A key factor behind the recovery was the relative stability of the naira, which helped ease the foreign exchange pressures that had previously eroded earnings. With the currency appreciating by about 7.5 percent during the year—its first gain in over a decade—net foreign exchange losses dropped significantly to around N14 billion.
This improvement was supported by lower realised FX losses and unrealised FX gains of N8.4 billion, compared to substantial unrealised losses in the prior year. As a result, profit before tax climbed to N89 billion, compared with a loss of N111.8 billion in 2024.
Strong Revenue Growth Amid Cost Pressures
Top-line performance also contributed meaningfully to the turnaround. Revenue rose by 21 percent to N619 billion, driven by a combination of price adjustments, improved sales volumes, and a relatively more predictable operating environment.
Gross profit increased to N210 billion from N131.35 billion a year earlier, reflecting stronger sales despite persistent cost pressures. However, rising input costs—particularly for raw materials, energy, and logistics—pushed cost of sales up to N409.4 billion.
Operating expenses also trended higher, with administrative, marketing, and distribution costs exceeding N124 billion, highlighting the continued impact of inflation across the supply chain.
Balance Sheet Strength Improves
One of the more significant shifts in the company’s financial position was the elimination of debt. International Breweries ended the year with no outstanding loans or overdrafts, reducing its exposure to high borrowing costs.
This translated into a net finance income of N6 billion, a marked improvement from a net finance cost of N20.7 billion recorded in 2024. The stronger balance sheet also supported overall profitability and reduced financial risk.
Despite the improved earnings, cash generation moderated slightly. Net cash from operations declined to N139.3 billion from N148.9 billion in the previous year. However, cash and cash equivalents increased significantly to N155.4 billion, up from N109.2 billion, reflecting stronger liquidity.
The company’s retained losses narrowed to N191.03 billion from N241.9 billion, lifting total equity to N499.8 billion. Nonetheless, no dividend was declared, as the company continues to rebuild its balance sheet.
Market Reaction and Outlook
Investors responded positively to the results, with the stock gaining nearly 7 percent at the close of trading on Friday. The rebound offers some relief for shareholders, although the stock remains down more than 13 percent year-to-date, ranking 126th on the NGX in performance terms.
Looking ahead, the sustainability of the recovery will depend heavily on macroeconomic conditions. While currency stability provided a crucial boost in 2025, ongoing global uncertainties—including geopolitical tensions in the Middle East—pose potential risks.
In addition, high input costs, pressured consumer spending, and the sector’s dependence on imported materials continue to weigh on margins. As such, while the return to profitability marks a significant milestone, maintaining that momentum will require careful navigation of both domestic and global economic headwinds.