…NB’s Q1 performance highlights a business navigating a difficult consumer environment with greater operational discipline.
…Revenue up by 7.7% y/y.
…profit after tax climbed 25.6% y/y to N55.95 billion
SAT APRIL 25 2026-theGBJournal| Nigerian Breweries Plc (NB) opened 2026 on a stronger earnings footing, posting a 25.6% year-on-year increase in earnings per share to NGN1.80 in Q1-26, as disciplined cost management and sharply lower finance costs helped cushion the impact of still-fragile consumer demand.
While topline growth remained modest amid weak volume momentum and limited pricing carryover, the brewer’s ability to contain input costs and materially reduce funding pressures underpinned a solid improvement in profitability.
NB’s Q1 performance highlights a business navigating a difficult consumer environment with greater operational discipline.
Even so, softer cost growth, improving finance income, and lower borrowing costs drove stronger earnings, reinforcing the brewer’s resilience and positioning it to benefit from any recovery in consumer demand and broader macro conditions.
NB grew revenue by 7.7% y/y to N418.02 billion in Q1-26 (Q1-25: 68.9% y/y-N383.64 billion), reflecting limited pricing carryover amid subdued volume performance, as demand remained constrained by high product elasticity and fragile consumer spending. On a q/q basis, revenue declined by 1.9%.
Gross margin expanded modestly by 13bps y/y to 43.5% (Q1-25: 43.4%), as cost of sales growth (+7.4% y/y) remained slightly below revenue growth.
The relatively muted increase in cost of sales was driven by softer growth in raw materials and consumables (+5.0% y/y), while q/q cost of sales declined 14.0%, reflecting sustained cost optimisation efforts.
Operating efficiency, however, came under pressure as operating leverage weakened. EBIT and EBITDA margins declined by 107bps y/y and 23bps y/y to 21.2% and 26.2%, respectively, weighed down by a 12.3% y/y increase in operating expenses.
This was largely driven by a 30.0% y/y jump in advertising and sales expenses to N35.68 billion, as the company stepped up brand support and route-to-market investments to defend market share and deepen market penetration.
On the financing side, NB recorded a significant improvement, with net finance costs declining 54.5% y/y to NGN6.95 billion (Q1-25: NGN15.27 billion).
The improvement was driven by a 403.3% y/y surge in finance income and a 46.1% y/y reduction in finance costs, reflecting stronger cash yields and easing funding pressures.
Overall, profit before tax rose 14.9% y/y to N80.41 billion in Q1-26 (Q1-25: N60.99 billion), while profit after tax climbed 25.6% y/y to N55.95 billion, supported further by a lower effective tax rate of 30.4% (Q1-25: 36.3%).
According Cordros Research, NB’s Q1-26 performance underscores improving earnings quality, with modest revenue growth, cost discipline, and significantly lower finance costs driving stronger profitability.
While elevated brand and distribution spend weighed on operating margins, the strategy reflects a deliberate push to protect market share in a still-demand-constrained environment.
”Looking ahead, we expect revenue growth to remain largely volume-led, tracking consumer demand recovery, while earnings should benefit from continued cost optimisation, FX stability, and a gradually improving macro backdrop,” Cordros said.
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