Bumper earnings boost consumer goods firms’ share price in H1

Nigeria’s consumer goods sector witnessed a strong first half (H1) of 2025, as bumper earnings results from top manufacturers drove significant gains in their share prices on the Nigerian Exchange (NGX).

According to Proshare, in a report titled Nigerian Capital Markets H1 2025: Who Rose, Who Fell, and What’s Next?, the NGX Consumer Goods Index posted an impressive year-to-date return of 52.21 percent, outperforming other sectors.

This was driven by strong first-quarter earnings releases and positive investor sentiment towards Fast-Moving Consumer Goods (FMCG) companies, which have demonstrated resilient pricing power amid inflationary pressures.

The index notably surged in April by 10.4 percent following the release of Q1 results, maintaining positive momentum in May and April with gains of 18.7 percent and 10.8 percent, respectively.

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.

The Afrinvest H1’2025 Macroeconomic Review and H2’2025 Outlook Report disclosed that the share prices of HoneyFlour (+252.4 percent), NASCON (+92.8 percent), and International Breweries (+91 percent) were top performers during the first half of the year.

Despite persistent inflation, which fell to 22.97 percent in May from 23.71 percent in April, consumer spending on essential goods remained steady.

Analysts attribute this to the inelastic nature of FMCG and the successful recalibration of pricing and pack sizes to sustain demand.

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“Consumer goods companies have become more agile, deploying smaller product sizes and leveraging local sourcing to manage input costs,” said a Lagos-based analyst. “This has helped them protect margins and attract investor confidence.”

The strong earnings season also renewed interest from foreign portfolio investors, who had previously exited the market amid concerns about macroeconomic volatility and currency instability.

Improved corporate governance, consistent dividend declarations, and greater policy clarity have all contributed to renewed foreign inflows.

In addition, monetary tightening by the Central Bank of Nigeria (CBN) has helped stabilise market conditions, with the benchmark interest rate held steady at 27.5 percent for two consecutive meetings.

The naira appreciated in both the official and parallel foreign exchange markets during the first half of the year, supported by increased dollar inflows from foreign investors.

According to CBN data, the naira gained N11.65 in the official window, closing at N1,529.71 per dollar on June 30, compared to N1,541.36 at the beginning of the month.

In the parallel market, it strengthened by N90, or 5.7 percent, moving from N1,660 to N1,570 over the same period. The naira’s improved performance reflects growing confidence in the foreign exchange market, bolstered by stronger external inflows and a more favorable investment climate.

What to expect for the second half

Analysts at Afrinvest said, “We hold a mildly optimistic outlook for the consumer goods sector in H2. We expect the recent improvement in FX stability and reduced inflationary pressure to support an overall positive FY’2025 bottom-line performance for industry players.”