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INDUSTRY REVIEW: Losses, unfriendly business environment hit Guinness, Nigerian Breweries, IB, Champion Brew



The brewery industry is struggling to curb the cost of operations, and this is affecting the net profit of the sector. As the former rose by 18.16 per cent in the third quarter, the profit generated after tax fell by -0.43 per cent.

This was on the back of loss in International Breweries, as well as dip in both Guinness and Champions Brew, with only Nigerian Breweries increasing its net profit in Q3.

Ripples Nigeria analysis of the industry showed that combined net profit fell from N6.94 billion reported in Q3 last year to N6.92 billion same period this year, failing to grow in line with the cost of producing the drinks, which was N158.52 billion in Q3 2022, against the N134.16 billion expended on their products last year third quarter.

The industry’s profit after tax fell despite recording 14.13 per cent year-on-year growth in revenue, which was also below the growth in expenses.

Nigerian Breweries, Guinness, International Breweries and Champions Brew generated N233.87 billion between July and September this year, surpassing the N196.16 billion the four companies managed to gross same period in 2021.

Brewery company lament Nigeria’s business environment

In a corporate document obtained by Ripples Nigeria, International Breweries had complained of uncontrollable cost driven by inflation which is also impacting revenue.

The document shared with investors said, “The last three months have been characterized by elevated inflationary pressure which has had an impact on consumer disposable income”

It also reads in part, “Gross profit and margins declined on elevated costs largely due to higher energy prices, FX illiquidity, commodity costs headwinds, severe weather, and overall inflationary pressures.”

During the period in review, Ripples Nigeria understands that inflation rose from 18.6 per cent in June to 20.77 per cent in September, reflecting a significant rise in cost of living and operation, both of which usually cause a drop in net profit.

Breakdown of beer companies’ performance

Nigerian Breweries

Nigerian Breweries generated N119.36 billion within three months of the period in review, in contrast to the N100.02 billion turnover of Q3 last year, indicating a 19.34 per cent year-on-year growth.

The brewer was able to grow its net profit by a significant 700 per cent after reporting it recorded N3.98 billion profit after tax in the third quarter of 2022, surpassing the N498.37 million PAT posted in Q3 last year.

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Nigerian Breweries’ net profit blew through the roof despite cost of producing its products rising by 23.98 per cent to N83.57 billion in Q3 2022, well above the N67.40 billion spent same period in 2021.

Champion Brew

The management of Champion Brew was able to grow the firm’s turnover by 17.88 per cent year-on-year, from N2.23 billion generated in the review period last year, to closing the same period this year with N2.63 billion revenue.

However, the story was different for the profit after tax, which fell by -3.26 per cent to N183.90 million in the third quarter this year, below the N190.10 million reported in Q3 2021.

The decline, according to Ripples Nigeria’s analysis, followed a 14.60 per cent increase in the cost of sales that was N1.45 billion between July to September last year, but rose to N1.67 billion same period year after.


The revenue grossed by Guinness in the third quarter of 2022 was N52.84 billion. This is 11.33 per cent higher than the N47.46 billion generated during the corresponding period in 2021.

Guinness was able to slow the growth of its expenses to 7.38 per cent in comparison to other producers. It had spent N32.23 billion in 2021 Q3 to ensure its products were available in the market, but a year after in the review period, it reported N34.61 billion cost of production.

But this was not enough to grow the company’s profit after tax, as it dipped by -32.03 per cent from the N4.04 billion net profit posted in Q3 of 2021 to N2.74 billion in third quarter this year.

International Breweries

International Breweries’ revenue grew by 5.59 per cent after generating N49.02 billion in the third quarter of this year, slightly above the N46.43 billion the brew producer grossed in the corresponding period last year.

The company had a disappointing third quarter when compared to its market rivals, considering it recorded N3.14 billion loss after tax. The management was unable to replicate the N2.21 billion net profit reported in Q3 a year before.

International Breweries’ earnings problem could be linked to the cost of producing the firm’s brands, having spent N38.67 billion within the three months under review, which is 16.97 per cent higher than the N33.06 billion disbursed in third quarter of 2021.

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