Home Economy Nigeria’s Brewery Sector Records N1.9tn Revenue in 2024, Signals Recovery Despite High Costs – Afrinvest

Nigeria’s Brewery Sector Records N1.9tn Revenue in 2024, Signals Recovery Despite High Costs – Afrinvest

by Radarr Africa

Nigeria’s brewery industry bounced back in 2024 with a remarkable 71.8 per cent year-on-year rise in revenue, hitting ₦1.9 trillion. This performance exceeded the earlier forecast of 39.2 per cent growth by investment banking firm, Afrinvest West Africa.

The new figures were revealed in Afrinvest’s latest report titled “Brewing Back to Profitability”, published in May 2025. According to the report, the sharp growth was driven mainly by inflation-induced price increases across beer products and a rise in consumer spending following the increase in the national minimum wage by 133.5 per cent to ₦70,000 in the third quarter of 2024.

The report also noted that December 2024 saw a major boost in beer consumption due to high spending during the popular “Detty December” festivities in Lagos and other cities. An estimated ₦111.5 billion was spent in the entertainment and tourism sectors during that period, which helped push up beer sales.

However, despite the impressive revenue, the sector recorded its second straight annual Loss Before Tax, totalling ₦364.8 billion in 2024. High operating costs, currency depreciation, and expensive fuel contributed to this negative bottom line.

Yet, there were signs of a turnaround. In the fourth quarter of 2024, all the major players—Nigerian Breweries Plc, Guinness Nigeria Plc, International Breweries Plc, and Champion Breweries Plc—posted a combined Profit After Tax of ₦7.4 billion, marking their first quarterly profit since Q1 2022. This momentum continued into 2025, with Q1 profits rising by 148.2 per cent year-on-year to ₦81.9 billion.

Despite these gains, cost pressures weighed heavily on the sector. The Cost of Goods Sold jumped to ₦1.3 trillion, outpacing revenue growth due to economic challenges. The naira lost 46.2 per cent of its value to close 2024 at ₦1,625 per dollar. Petrol prices averaged ₦939.5 per litre in December 2024, after peaking at ₦1,184.83 per litre in May of the same year.

In addition, operating expenses rose by 42.3 per cent to ₦564.3 billion, while foreign exchange losses shot up by 118.1 per cent to ₦412.6 billion. Finance costs more than doubled, rising by 113.7 per cent to ₦255.1 billion.

Looking ahead, Afrinvest is projecting a return to profitability for the Nigerian brewery sector in 2025, with a forecast Profit Before Tax of ₦215.3 billion. This projection is based on hopes for macroeconomic stability, corporate tax reforms, and strategic internal steps like capital raising, mergers, and product resizing to reduce costs.

On the investment front, Afrinvest described the Nigerian brewery sector as a good long-term opportunity. The industry’s EV/EBITDA ratio stood at 3.8x—cheaper than two-thirds of its peers in emerging markets. However, the sector’s price-to-book ratio was relatively high at 19.4x, second only to China’s 29.8x, due to weak earnings per share since mid-2022.

For investors, Afrinvest’s analysts gave a HOLD recommendation for Nigerian Breweries and Guinness Nigeria, with fair value estimates of ₦56.77 and ₦86.69 respectively, compared to their market prices of ₦52.00 and ₦80.00 as of May 13, 2025. International Breweries received a SELL rating, with a fair value of ₦7.16, representing a 21.8 per cent downside from its market price of ₦9.15.

On the global front, the brewery industry faced challenges, with beer sales volume falling for the second straight year to 1.78 million hectolitres in 2024. Still, revenue rose slightly by 3.3 per cent to $617.7 billion. Giants like Carlsberg and AB InBev helped lift combined global profits by 80.4 per cent, while Heineken, Diageo, and Kirin Holdings saw earnings drop.

Afrinvest said global performance in 2025 will likely depend on continued product premiumisation, innovation targeted at Gen Z consumers, decarbonised supply chains, and strategic mergers. Globally, the sector contributed $878 billion to GDP in 2023, supported 32 million jobs, and consumed ₦10.6 billion worth of agricultural inputs.

Afrinvest stated that although Nigeria’s brewery industry still faces tough challenges, the long-term outlook remains attractive, especially for investors willing to weather short-term shocks.

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