Brewing Back to Profitability: Nigeria’s Brewery Sector Surges with N1.9 Trillion Revenue in 2024
Despite macroeconomic hurdles, Nigeria’s brewery sector made a striking comeback in 2024 with a 71.8% year-on-year revenue growth, hitting a remarkable ₦1.9 trillion. This performance significantly outpaced Afrinvest’s initial growth projection of 39.2%, signalling a strong rebound from recent lows.
Key Drivers of the Rebound
Afrinvest’s report, titled “Brewing Back to Profitability,” attributes the revenue growth to several pivotal factors:
• Inflation-led price hikes across product lines
• Boost in consumer spending power due to the new ₦70,000 minimum wage
• ₦111.5 billion in festive spending during Lagos’s vibrant “Detty December” season, fuelling beer sales
Recovery in Profitability
Though the sector posted a second consecutive Loss Before Tax of ₦364.8 billion in 2024, the final quarter offered optimism:
• All major players — Nigerian Breweries, Guinness Nigeria, International Breweries, and Champion Breweries — reported a combined Profit After Tax (PAT) of ₦7.4 billion in Q4:2024
• The upward trend continued in Q1:2025, with PAT soaring by 148.2% YoY to ₦81.9 billion
⚠️ Persistent Challenges
However, recovery wasn’t without headwinds:
• Cost of Goods Sold (COGS): Climbed to ₦1.3 trillion, rising faster than revenue
• Naira depreciation: 46.2% drop to ₦1,625/$
• Fuel prices: Averaged ₦939.5/litre in December 2024
• Operating expenses: Jumped by 42.3% to ₦564.3 billion
• FX losses: Rose 118.1% to ₦412.6 billion
• Finance costs: Surged 113.7% to ₦255.1 billion
Outlook for 2025
Afrinvest forecasts a full return to profitability in 2025, projecting a Profit Before Tax of ₦215.3 billion. The optimism is anchored on:
• Macroeconomic stabilisation
• Corporate tax reforms
• Internal strategies like:
• Capital raising
• M&A synergies
• Product resizing and cost optimisation
Investment Insight
Afrinvest’s valuation insights indicate long-term attractiveness:
• EV/EBITDA: 3.8x — lower and more appealing than two-thirds of emerging market peers
• P/B ratio: 19.4x — high due to past earnings pressure, but still valuable for patient investors
Stock Recommendations:
Company Recommendation Fair Value Market Price (as of May 13, 2025) Upside/Downside
Nigerian Breweries HOLD ₦56.77 ₦52.00 +9.2%
Guinness Nigeria HOLD ₦86.69 ₦80.00 +8.4%
International Breweries SELL ₦7.16 ₦9.15 −21.8%
Global Context
Globally, the brewery industry continued to face volume pressure:
• Global sales volume: Fell for the second year to 1.78 million hectolitres
• Global revenue: Rose slightly by 3.3% to $617.7 billion
• PAT growth: Driven by Carlsberg and AB InBev (+80.4%), while Heineken, Diageo, and Kirin saw earnings slump
Afrinvest expects 2025 global trends to focus on:
• Premiumisation
• Gen-Z innovation
• Supply chain decarbonisation
• Strategic M&A
Economic Contribution
• Global GDP contribution (2023): $878 billion
• Jobs supported: 32 million
• Agricultural input consumption: ₦10.6 billion
Conclusion
Despite persistent structural and macroeconomic challenges, Afrinvest concludes that Nigeria’s brewery sector remains a strong long-term bet. For investors who can weather short-term volatility, the industry offers resilient value and recovery potential.
Despite macroeconomic hurdles, Nigeria’s brewery sector made a striking comeback in 2024 with a 71.8% year-on-year revenue growth, hitting a remarkable ₦1.9 trillion. This performance significantly outpaced Afrinvest’s initial growth projection of 39.2%, signalling a strong rebound from recent lows.
Key Drivers of the Rebound
Afrinvest’s report, titled “Brewing Back to Profitability,” attributes the revenue growth to several pivotal factors:
• Inflation-led price hikes across product lines
• Boost in consumer spending power due to the new ₦70,000 minimum wage
• ₦111.5 billion in festive spending during Lagos’s vibrant “Detty December” season, fuelling beer sales
Recovery in Profitability
Though the sector posted a second consecutive Loss Before Tax of ₦364.8 billion in 2024, the final quarter offered optimism:
• All major players — Nigerian Breweries, Guinness Nigeria, International Breweries, and Champion Breweries — reported a combined Profit After Tax (PAT) of ₦7.4 billion in Q4:2024
• The upward trend continued in Q1:2025, with PAT soaring by 148.2% YoY to ₦81.9 billion
⚠️ Persistent Challenges
However, recovery wasn’t without headwinds:
• Cost of Goods Sold (COGS): Climbed to ₦1.3 trillion, rising faster than revenue
• Naira depreciation: 46.2% drop to ₦1,625/$
• Fuel prices: Averaged ₦939.5/litre in December 2024
• Operating expenses: Jumped by 42.3% to ₦564.3 billion
• FX losses: Rose 118.1% to ₦412.6 billion
• Finance costs: Surged 113.7% to ₦255.1 billion
Outlook for 2025
Afrinvest forecasts a full return to profitability in 2025, projecting a Profit Before Tax of ₦215.3 billion. The optimism is anchored on:
• Macroeconomic stabilisation
• Corporate tax reforms
• Internal strategies like:
• Capital raising
• M&A synergies
• Product resizing and cost optimisation
Investment Insight
Afrinvest’s valuation insights indicate long-term attractiveness:
• EV/EBITDA: 3.8x — lower and more appealing than two-thirds of emerging market peers
• P/B ratio: 19.4x — high due to past earnings pressure, but still valuable for patient investors
Stock Recommendations:
Company Recommendation Fair Value Market Price (as of May 13, 2025) Upside/Downside
Nigerian Breweries HOLD ₦56.77 ₦52.00 +9.2%
Guinness Nigeria HOLD ₦86.69 ₦80.00 +8.4%
International Breweries SELL ₦7.16 ₦9.15 −21.8%
Global Context
Globally, the brewery industry continued to face volume pressure:
• Global sales volume: Fell for the second year to 1.78 million hectolitres
• Global revenue: Rose slightly by 3.3% to $617.7 billion
• PAT growth: Driven by Carlsberg and AB InBev (+80.4%), while Heineken, Diageo, and Kirin saw earnings slump
Afrinvest expects 2025 global trends to focus on:
• Premiumisation
• Gen-Z innovation
• Supply chain decarbonisation
• Strategic M&A
Economic Contribution
• Global GDP contribution (2023): $878 billion
• Jobs supported: 32 million
• Agricultural input consumption: ₦10.6 billion
Conclusion
Despite persistent structural and macroeconomic challenges, Afrinvest concludes that Nigeria’s brewery sector remains a strong long-term bet. For investors who can weather short-term volatility, the industry offers resilient value and recovery potential.