Nigeria’s brewery industry witnessed a turnaround in 2024, recording a 71.8 per cent year-on-year surge in revenue to N1.9tn, surpassing Afrinvest West Africa’s earlier growth projection of 39.2 per cent.
This was revealed in Afrinvest’s latest sector update report titled “Brewing Back to Profitability”, released in May 2025.
The report attributed the revenue performance to inflation-led price increases across product lines and an increase in consumer purchasing power following the national minimum wage hike by 133.5 per cent to N70,000 in the third quarter of 2024.
Additionally, festive spending during “Detty December” events, especially in Lagos, injected an estimated N111.5bn into the entertainment and tourism sectors, further boosting beer sales.
Despite the industry recording its second consecutive annual Loss Before Tax of N364.8bn in 2024, the fourth quarter brought signs of recovery. For the first time since the first quarter of 2022, all major players, Nigerian Breweries Plc, Guinness Nigeria Plc, International Breweries Plc, and Champion Breweries Plc, posted a combined Profit After Tax of N7.4bn in Q4:2024.
This momentum was sustained into the first quarter of 2025, with PAT rising by 148.2 per cent year on year to N81.9bn.
However, the road to recovery was marred by cost pressures. Cost of Goods Sold rose faster than revenue, increasing by 14.4 percentage points to N1.3 tn, primarily driven by macroeconomic headwinds. These included a 46.2 per cent depreciation of the naira to N1,625.00/$ by year-end and elevated petrol prices, which averaged N939.5/litre in December, after peaking at N1,184.83/litre in May 2024. Operating expenses also jumped by 42.3 per cent to N564.3bn, foreign exchange losses soared by 118.1 per cent to N412.6bn, and finance costs rose sharply by 113.7 per cent to N255.1bn.
Looking ahead, Afrinvest projects a return to profitability for the Nigerian brewery sector in 2025, forecasting a Profit Before Tax of ₦215.3bn. This outlook is underpinned by anticipated macroeconomic stabilisation, corporate income tax reforms, and internal strategies such as capital raising, merger and acquisition synergies, and cost-optimisation measures including product resizing.
From a valuation perspective, Afrinvest suggests that the Nigerian brewery sector offers more value for long-term investors. The sector’s EV/EBITDA ratio stood at 3.8x, making it more attractive than two-thirds of its emerging market peers, despite a high price-to-book (P/B) ratio of 19.4x, second only to China’s 29.8x. The elevated P/B ratio reflects the depressed earnings per share performance observed since the second quarter of 2022.
Afrinvest’s equity analysts gave a “HOLD” recommendation for Nigerian Breweries and Guinness Nigeria, citing modest upsides of 9.2 per cent and 8.4 per cent, respectively, based on fair value estimates of N56.77 and N86.69 per share, compared to market prices of N52.00 and N80.00 as of 13 May 2025. Conversely, International Breweries was rated a “SELL”, with its fair value pegged at N7.16 — representing a 21.8 per cent downside to its market price of N9.15.
Globally, the brewery industry continued to face headwinds, with sales volume declining for the second straight year to 1.78 million hectolitres in 2024. Despite volume pressure, global revenue rose marginally by 3.3 per cent to $617.7bn. Global giants like Carlsberg and AB InBev drove an 80.4 per cent growth in combined Profit After Tax, although Heineken, Diageo, and Kirin Holdings recorded sharp earnings declines.
Afrinvest expects global performance in 2025 to be shaped by ongoing premiumisation, Gen-Z-targeted innovation, supply chain decarbonisation, and strategic M&A activity. Meanwhile, the sector’s contribution to global GDP stood at $878 bn in 2023, with 32 million jobs supported and N10.6 bn worth of agricultural input consumed.
Afrinvest concludes that while Nigeria’s brewery sector still grapples with structural challenges, it remains an attractive long-term play, particularly for patient investors who can withstand short-term volatility.
