Olufemi Adeyemi
Nigerian Breweries Plc has closed the first half of 2026 without borrowings after a sharp improvement in cash generation helped the company settle its outstanding loans and strengthen its balance sheet.
The development marks a significant improvement in the brewer’s financial position as the company continues its recovery from the operational and macroeconomic pressures that had weighed on its performance in previous periods.
Speaking during an investor call on Friday, the company’s Finance Director, Maria Karaseva, said the brewer generated N73bn in net free operating cash flow during the six months ended June 2026, representing a 264 per cent increase compared with the corresponding period in 2025.
The stronger cash position enabled Nigerian Breweries to fully repay its outstanding loans, leaving the company with zero borrowings at the end of the reporting period.
Karaseva said the company also recorded net revenue of more than N1tn during the period, while its asset base stood at approximately N1tn, underscoring the scale of its operations and the progress made in rebuilding its financial resilience.
Beyond the improvement in cash generation, the company’s internal productivity programme delivered N76bn in efficiency gains during the period. The gains, according to the Finance Director, contributed to a two-percentage-point expansion in gross profit margin despite persistent inflationary and other macroeconomic pressures.
The improved operating efficiency also supported an 18 per cent year-on-year increase in profit before tax, indicating that the company’s cost-control and productivity measures were translating into stronger bottom-line performance.
Karaseva attributed the improvement to deliberate financial discipline, better working capital management and sustained efforts to control costs across the business.
“Our focus throughout the period was to strengthen cash generation and build a more resilient financial position. By improving our cash conversion, managing working capital more efficiently, and translating productivity gains into cash, we generated N73bn in net free operating cash flow, fully repaid our loans, and returned retained earnings to positive territory,” she said.
The return of retained earnings to positive territory represents another important step in the company’s financial recovery, particularly following earlier periods of pressure on profitability and balance-sheet strength.
For investors, the elimination of debt could also reduce the company’s exposure to rising financing costs and provide greater flexibility in deploying cash towards its core operations. A stronger cash position may give the brewer additional room to navigate volatility in input costs, foreign exchange and consumer demand.
However, the company is expected to remain focused on protecting the gains recorded in the first half as Nigeria’s operating environment continues to present challenges, particularly through inflationary pressures and foreign-exchange volatility.
Karaseva said the company would maintain its emphasis on disciplined cost management while seeking to grow volumes and further improve operational efficiency.
She also identified the reduction of foreign-exchange risk exposure as a priority, alongside efforts to mitigate the impact of inflation through productivity improvements and more efficient business processes.
The brewer’s first-half performance therefore points to a broader shift from balance-sheet repair towards strengthening sustainable cash generation and operational growth.
With its loans fully repaid, retained earnings back in positive territory and free operating cash flow significantly higher than a year earlier, Nigerian Breweries enters the second half of 2026 with a stronger financial foundation.
The challenge for management will now be to sustain the momentum while balancing volume growth with pricing, affordability and cost pressures in an increasingly competitive consumer market.