International Breweries (IBPLC), one of Nigeria’s top beer makers, has recorded seventh straight after-tax losses despite its revenue almost doubling in 2024, the company’s audited annual financial report shows.
According to the company’s report, the Osun-based brewer saw its losses balloon to N113.6 billion in 2024 from N70 billion it recorded in the previous year, rising by 62.5 percent.
The brewer had been on a losing streak since 2018 when it recorded a loss of N3.87 billion. And the loss jumped almost five-fold to N27.79 billion in 2019 and contracted to N16.08 billion in 2020. The company’s loss slightly rose again to N17.66 billion in 2021 and even higher to N21.63 billion in 2022.
The recurring losses stem from the brewer’s exposure to foreign exchange which became volatile after the government unified the exchange rate and devalued the naira, leading to about a 70 percent slump of the currency.
Meanwhile, revenue continues to shoot up, reaching a nine-year high and almost doubled in the financial year ended 31 December 2024, indicating strong revenue growth.
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Its revenue grew from N260.5 billion in 2023 to N488.9 billion last year, highlighting how the firm has been able to adjust to the shocks witnessed in the last two years.
“While continually delivering strong revenue growth, our inability to source adequate foreign exchange due to market illiquidity impacts profitability, as we incurred significant FX losses on our foreign currency-denominated debt and liabilities,” the beer maker said in its financial statement.
“To address this, the company successfully raised fresh capital through a rights issue and settled the outstanding loan liability. Going into 2025, the company expects to return to profitability in the absence of any significant non-operating foreign currency exposure,” it added.
The firm continues to grapple with FX-induced losses as its unrealised foreign exchange loss for the year stood at N128.4 billion while the brewers realised foreign exchange loss jumped to N294.1 billion from N14.3 billion in 2023.
Beer makers make use of raw materials such as barley, hops which are largely imported. This meant sourcing and scarce FX, leading to higher input cost in terms of raw materials.
The firm spent more than double to source raw materials in 2024 as cost surged from N25.6 billion in 2023 to N58.14 billion last year.
Obi Achebe, chairman of the board of directors at International Breweries Plc, said in a statement that the repayment of the company’s foreign exchange-denominated loans would propel the firm back to the path of sustainable profitability.
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“We are proud of the strides we have made in strengthening our business foundation and positioning for sustainable growth. The repayment of our outstanding $379.9 million loan, enabled by our parent company, AB InBev has bolstered our financial position.
“This recapitalisation not only strengthens our balance sheet but also sets the stage for long-term profitability and growth. We are now better equipped to drive innovation, improve operational efficiency, and seize new opportunities.”
International Breweries opened its N588 billion rights issue programme on May 21, 2024, where the brewer seeks to issue 161,172,395,100 new ordinary shares of 2 kobo each at an offer price of N3.65 per share.
According to a recent statement by the brewer, Achebe also commended the company’s progress, particularly after its rights issue, which enabled the repayment of its forex-denominated loan, which had impacted the company over the years.
“The elimination of our FX exposure will improve IBPLC’s cash flows and will support the company’s return to profitability. The offer was supported by our core shareholder, Anheuser-Busch InBev who followed their rights in full. This is a strong indication of AB InBev’s commitment and belief in the Nigerian market opportunity and overall Nigerian economy,” Achebe said.
