Five FMCG firms post turnaround profits in Q1 amid recovery hopes

Nigeria’s Fast-Moving Consumer Goods (FMCG) sector recorded a strong recovery in the first quarter of 2025, after macroeconomic headwinds impacted their bottom line in the previous year.

Five major players, Cadbury Nigeria Plc, Champion Breweries Plc, International Breweries Plc, Nestlé Nigeria Plc, and Nigerian Breweries Plc, collectively reported a combined after-tax profit of N110.9 billion, marking a sharp reversal from the N262.3 billion loss recorded in the same period of 2024.

In terms of revenue, these firms reported a 65.7 percent rise to N897.6 billion from N541.6 billion.

Analysts believe this performance could signal a more stable outlook for the consumer goods sector, although persistent inflation, interest rate hikes, and foreign exchange volatility remain key risks.

Read also: Nestlé, BUA, Nascon top most profitable FMCGs in Q1

“This rebound is a positive signal for investors and reflects the resilience of Nigeria’s FMCG sector amid tough macroeconomic conditions,” said Adewale Johnson, a consumer market analyst in Lagos. “If the current momentum is sustained and policy reforms continue, we could see consistent profitability through the rest of the year.”

Similarly, Uchenna Uzo, professor of Marketing at Lagos Business School, noted that many consumer goods companies are better positioned to navigate macroeconomic headwinds, as market conditions have become relatively more stable than last year.

“It’s not that consumers are buying significantly more,” he explained, “but firms have implemented price increases, which have, in some cases, led to a doubling of profits.”

Nigerian Breweries, which recorded the highest profit growth this year, reported a 186 percent increase in net profit, sustaining the return to profitability that began in the last quarter of 2024. This reflects the full impact of financial restructuring and cost-saving initiatives implemented as part of its business recovery plan.

“Importantly, net finance expenses dropped by 83 percent — a direct result of the prudent utilisation of proceeds from the 2024 Rights Issue, which were used to reduce foreign currency liabilities and optimise the company’s capital structure. This substantial reduction in finance costs has materially strengthened the bottom line and enhanced financial resilience,” it added.

Analysis by BusinessDay shows that the recent stability of the naira against the US dollar led to a sharp drop in FX-induced losses for these surveyed companies, falling to N3.9 billion in the first three months of 2025 from N289 billion in Q1 2024.

Read also: FMCGs’ borrowing costs soar on high interest rates 

The combined Q1 performance suggests that these firms have not only adjusted to the challenging economic terrain but are also regaining investor confidence, as reflected in modest upticks in their stock prices on the Nigerian Exchange (NGX).

In January 2025, Cadbury’s shares traded at N23. By April, the stock had surged to N29, representing a 26 percent increase over four months. Champion Breweries recorded a modest rise from N3.95 in January to N4.70 in April, a 19 percent growth. While the growth appears modest compared to peers, it reflects stability and investor confidence in its regional dominance and lean operating structure.

After facing headwinds early in the year with share prices dipping from N5.5 in January to N5.1 in March, International Breweries Plc rebounded sharply in April to N7.38. This 34 percent quarterly growth is the highest among the reviewed stocks.

For Nestlé, the share price remained flat at N975 for the first two months of the year, before climbing to N1,020 in March and N1,100 in April, signaling a 12.8 percent gain, while Nigerian Breweries saw its stock rise from N35.8 in January to N43 in April, a 20 percent increase.

For investors seeking exposure to Nigeria’s consumer market, these gains present renewed optimism for long-term value and dividend growth.