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Q1 2022: Nigerians consuming more alcohol help beer makers record profit growth

Q1 2022: Nigerians consuming more alcohol help beer makers record profit growth

Despite the economic headwinds facing them, Nigeria’s largest beer makers have announced profit increases in the first quarter of 2022 helped by increased beer consumption by most Nigerians.

Findings by BusinessDay showed the high cost of production and inflationary environment are making Nigeria’s top beer (alcohol) makers focus more on improving their profitability and financial performance as against fighting for market share and brand awareness.

Between 2019 and 2021, the beer makers have increased prices more than twice due to high Excise Duty, a levy on the manufacture of locally produced goods.

The beer makers surveyed by BusinessDay include Nigerian Breweries, Guinness Nigeria and Champion.

Nigerian Breweries

Nigerian Breweries, in its recently released financial books saw a 30 percent jump in revenue to reach N137.8 billion, the highest in its five-year financials.

The beer maker’s revenue stood at N137.8 billion in the first three months of 2022 as against N105.7 billion in the first three months of 2021.

The company profit after tax jumps 77.7 percent to reach N13.6 billion in March 2022 as against N7.7 billion in March 2021.

The beer maker’s cost of sales which implies the direct cost of making beer jumps 14 percent to reach N75.3 billion as against N66.0 billion in the period under review.

Total assets climbed 17 percent to N521.4 billion in March 2022 from N445.5 billion in the previous year.

Inventories rose to N68.5 billion, a 73 percent increase from N39.6 billion in the period under review.

Nigerian Breweries’ cash and cash equivalent rose to N23 billion in March 2022, coming from N18.4 billion in March 2021.

Read also: Nigeria’s biggest consumer goods firms walk tight rope on rising operation cost


Guinness Nigeria, one of Nigeria’s largest beverage and alcoholic companies, earned its highest third-quarter ending March 2022 revenue in five years.

It grew its revenue by 18 percent to N29.65 billion in the first three months of 2022 from N28.76 billion in the comparable periods last year. It has grown its revenue by 44.1 percent since 2018 when N34.93 billion was recorded.

In the first three months of 2022, Guinness recorded a surge in profit by 200.9 percent to N6.5 billion from N2.16 billion. It has also grown its profit by 119.6 percent from N2.96 billion in 2018.

The alcohol company incurred N22.59 billion on the production of its goods sold in the third quarter of its financial year 2022 compared to N28.76 billion in the same period in 2021.

The company’s Cash and cash equivalents, which shows the value of its assets that are in cash, was N52.68 billion in its nine-month period ending March 2022 compared to N38.34 billion in the corresponding period of 2021.

Likewise, its total assets grew by 31.79 percent to N207.32 billion in the period under review from N157.31 billion in the previous year.

Champion Breweries

Champion Breweries Plc, the brewer and marketer of Champion Lager Beer and Champ Malta, recorded a 161 percent increase in profit to N554.2 million in 2022 from N211.9 million in 2021, the highest in five years.

The beer company in its first-quarter 2022 result, recorded a revenue increase by 40 percent to N3.32 billion in 2022 from N2.38 billion in 2021.

Its cost of sales in 2022 also grew by 37. 5 percent to N2.02 billion from N1.47 billion in 2021. In 2020, the company recorded a decrease in the cost incurred in the production of its goods by 1.64 percent to N1.21 billion from N1.23 billion in 2019.

Total assets by the company also increased by 44 percent since 2018. The brewery company in its first-quarter 2022 result, grew its total assets by 7.8 percent to N14.54 billion from N13.49 billion in 2021.

A BusinessDay analysis of the cash flow statement reveals that the beer company’s cash and cash equivalent (liquid asset) increased to N3.27 billion in 2022 from N2.87 billion in 2021 in the last three months.

Expert’s Take

Chibundu Emeka-Onyenacho, Analyst (SSA Consumer), Equity Research, Renaissance Capital

Pricing was key. Players such as Nigerian Breweries increased prices in February and the acceptance was higher supported by reduced competition in the lager space (Guinness is reducing its exposure to lager and focusing on stout and spirits) and the fact that beer in Nigeria is still cheap compared to other African countries.

Analysts at CSL Stockbrokers Limited, a subsidiary of FCMB Group Plc

CSL recalls that the company introduced Orijin Tigernut and Ginger in October 2021, which has boosted market penetration.

Revenue grew across all key categories driven by its strategic focus brands, Malta Guinness and Guinness, as well as strong growth in local and imported spirits and the ready-to-drink category.

On a quarter-on-quarter basis, Revenue declined 1.84percent to N50.3bn in Q3 2022 from N61.7bn in Q2 2022.

The quarter-on-quarter decline can be largely attributed to seasonal demand factors (high Q2 base effect caused by December festivities).