International Breweries Plc has returned to profitability for the first time in seven years, underscoring the pivotal role of exchange rate stability in reshaping corporate earnings within Nigeria’s volatile macroeconomic environment.
The brewer, controlled by global drinks giant AB InBev, reported a net profit of N51 billion for the financial year ended December 2025, marking a reversal from the N113.6 billion loss recorded in 2024.Â
At the core of the recovery is a notable shift in currency dynamics. After years of persistent depreciation, the naira posted an appreciation of about 7.5 per cent in 2025; its first gain in over a decade. This change materially reduced the scale of FX-related losses that had previously eroded operating performance.
In 2024, devaluation, amounting to 41 per cent, triggered over N166 billion in FX losses, driven by both realised and unrealised exposures. These losses more than offset operating gains, pushing the company deeper into negative territory.
By contrast, FX losses narrowed to about N14 billion in 2025, supported by lower realised losses and unrealised FX gains of N8.4 billion. This improvement proved decisive, lifting profit before tax to N89 billion from a loss of N111.8 billion in the prior year.
Beyond currency effects, International Breweries Plc delivered solid revenue growth, with sales rising 21 per cent year-on-year to N619 billion. The increase was driven by a combination of price adjustments, improved sales volumes, and a relatively more predictable operating environment.
Gross profit climbed to N210 billion from N131.35 billion in 2024, reflecting the company’s ability to pass on part of its rising costs to consumers, even amid ongoing pressure on household purchasing power.
However, cost pressures remain entrenched. Cost of sales rose to N409.4 billion, reflecting higher expenses related to raw materials, energy, and logistics. Similarly, administrative, marketing, and distribution costs increased to over N124 billion, underscoring the inflationary environment across the supply chain.
A key highlight of the company’s financial performance is the strengthening of its balance sheet. The brewer exited 2025 with no outstanding loans or overdrafts, effectively eliminating interest-bearing debt.
This shift contributed to a swing in net finance position, with the company reporting net finance income of N6 billion compared with a net finance cost of N20.7 billion in 2024. Lower interest expenses, coupled with improved liquidity, supported overall profitability.
The company’s cash position also improved significantly, with cash and cash equivalents rising to N155.4 billion from N109.2 billion in the previous year. However, net cash generated from operating activities declined slightly to N139.3 billion, down from N148.9 billion, indicating some moderation in cash flow generation despite stronger earnings.
The return to profitability has begun to repair the company’s balance sheet, with retained losses narrowing to N191.03 billion from N241.9 billion in 2024. Total equity rose to N499.8 billion, reflecting improved financial stability.
Despite the positive earnings turnaround, the company did not declare a dividend, prioritising the reduction of accumulated losses and further strengthening of its financial position.
Investor sentiment responded positively to the earnings report, with shares of International Breweries Plc gaining nearly 7 per cent on Friday. The rebound offers some relief for a stock that has declined by more than 13 per cent year-to-date, reflecting earlier concerns about earnings volatility and macroeconomic headwinds.
While the stabilisation of the naira has provided a critical boost, the company continues to operate in a challenging environment. Input costs remain elevated, driven by persistent inflation in energy, logistics, and imported raw materials.
At the same time, consumer spending is under pressure, limiting the extent to which companies can pass on higher costs without affecting demand. For a mass-market product such as beer, pricing power remains constrained by weakening household incomes.
External risks also persist. Ongoing geopolitical tensions, particularly the Middle East conflict, continue to influence global oil prices and, by extension, Nigeria’s macroeconomic stability. Any renewed volatility in the exchange rate could quickly reverse recent gains.
