Nigerian Breweries Goes Debt-Free as Cash Generation Jumps 264% in H1

Nigerian Breweries Plc has strengthened its financial position after delivering a sharp improvement in cash generation during the first half of the year, enabling the brewer to fully repay its outstanding loans and close the reporting period with zero borrowings as its recovery gathers momentum.

The company’s Finance Director, Maria Karaseva, told investors during the company’s half-year earnings call that the brewer generated ₦73 billion in net free operating cash flow, representing a 264 percent increase compared with the corresponding period in 2025. She said the stronger cash performance was driven by disciplined financial management, improved working capital efficiency and sustained productivity initiatives across the business.

The brewer also crossed a major commercial milestone, recording more than ₦1 trillion in net revenue during the six-month period while maintaining an asset base of approximately ₦1 trillion, reflecting what management described as a healthier and more resilient balance sheet.

“Our focus throughout the period was to strengthen cash generation and build a more resilient financial position,” Karaseva said. “By improving our cash conversion, managing working capital more efficiently, and translating productivity gains into cash, we generated ₦73 billion in net free operating cash flow, fully repaid our loans, and returned retained earnings to positive territory. This represents a significant milestone in our recovery journey.”

The improved liquidity follows a difficult period for Nigerian Breweries and much of the country’s manufacturing sector, which faced soaring finance costs, foreign exchange losses and elevated production expenses after the naira’s sharp depreciation. Since raising fresh capital through a rights issue in 2024, the company has prioritized deleveraging, reducing finance costs and rebuilding shareholder confidence.

Beyond stronger cash flows, operational efficiency played a significant role in the brewer’s recovery. Karaseva disclosed that the company’s productivity programme delivered ₦76 billion in savings, contributing to a two-percentage-point expansion in gross profit margin. Those gains helped offset the effects of persistent inflation and supply chain pressures linked to geopolitical tensions in the Middle East, while supporting an 18 percent year-on-year increase in profit before tax.

Management said the combination of productivity improvements and tighter cost discipline has enabled the business to convert a larger share of its earnings into cash, an increasingly important measure of financial quality in Nigeria’s challenging economic environment.

The broader brewing industry continues to contend with weaker consumer purchasing power, rising energy costs and volatile input prices, prompting manufacturers to place greater emphasis on operational efficiency, value-driven product offerings and disciplined capital allocation. Against that backdrop, Nigerian Breweries’ return to a debt-free position marks one of the clearest signs yet that its restructuring efforts are beginning to translate into sustainable financial strength.

Looking ahead, the company says it will maintain its focus on prudent cash and cost management while pursuing higher sales volumes and revenue growth. For investors, the first-half performance suggests that Nigerian Breweries’ recovery is no longer defined simply by improved earnings, but by a stronger ability to generate cash, preserve liquidity and finance future growth from its own operations.