International Breweries Reports First Profit Since 2017
International Breweries, Nigeria’s second-largest beer manufacturer, has achieved a significant milestone by reporting its first annual profit since 2017 for the financial year 2025. This positive outcome is especially comforting for AB InBev, the company’s largest shareholder in Belgium, which has faced seven years of substantial losses.
The brewery announced a profit after tax of NOK 50.9 billion for 2025, a remarkable turnaround from a net loss of NOK 113.6 billion in the same period the previous year, as detailed in an audited financial report released on Friday. International Breweries, well-known for brands such as Budweiser, Trophy, Hero, and Castle Light, boasts total assets valued at NOK 739.7 billion. This positions it as the second-largest beer producer in Nigeria, only trailing behind Heineken-backed Nigerian Breweries.
Following this announcement, the company’s stock price surged by 9.9%, reaching N13.35 on the Lagos market. This marks the largest single-day gain for the stock since the start of the year.
Challenges on the Path to Profitability
AB InBev acquired a majority stake in International Breweries in 2016, combining it with its existing 72.2% ownership. In 2017, the company initiated a merger with its subsidiaries, Interfact Beverages Limited and Pavod Breweries, aiming to leverage economies of scale in a highly competitive market. This strategic move was part of a broader effort to acquire a significant share of Africa’s brewing industry, particularly focusing on Nigeria, which has shown promising potential in the wake of sluggish performance in European and North American markets.
However, International Breweries started incurring losses in 2018, reporting a negative profit of 3.9 billion naira. This decline was attributed to a staggering 257.6% increase in financial costs and the challenges associated with aligning accounting practices across the newly formed entity. The establishment of an expansive greenfield factory, such as the Gateway facility with an initial investment of $250 million, added further strain due to escalating financing costs and mounting debt.
From 2019 to 2020, International Breweries faced compounding losses driven by soaring operational expenses and stagnant revenue growth. Losses peaked at over 113 billion naira in 2024, a culmination of several adverse factors, including currency depreciation tied to the dollar crisis and extensive currency reforms in Nigeria. However, a turnaround materialized last year with a significant increase in sales, which soared to NGN619 billion. The company also managed to reduce net foreign exchange losses from NGN165.7 billion to just NGN13.7 billion.
Concerns Over Shareholder Structure
By 2020, AB InBev had increased its stake in International Breweries to 87.3% through a rights issue that raised NOK 164.4 billion, aimed at addressing the financial burdens stemming from the Gateway plant’s construction. The proceeds from another rights issue in 2024 further alleviated the company’s debt, enabling it to settle a $379.9 million loan from Citibank, which had been outstanding for six years.
Subsequently, AB InBev exercised its rights in share sales, increasing its ownership to 96%. However, this level of concentration raises concerns about the accessibility of shares to potential investors, creating a situation where only 4% of outstanding shares are available for public trading. Such artificial scarcity can lead to inflated stock prices that may not accurately reflect fundamental business performance.
The Nigerian Exchange (NGX) mandates that listed companies maintain a free float of at least 20% of their shares or a minimum value of N40 billion. In a recent disclosure in January 2025, International Breweries stated that the NGX had extended the deadline for brewers to rectify any compliance issues regarding share availability.
