For returning to profitability, a leading ratings agency, GCR Ratings, has revised the outlook of Nigerian Breweries Plc to stable from evolving.
Similarly, the national scale long-term and short-term issuer ratings of AA(NG) and A1+(NG) accorded to the brewery giant have been affirmed by GCR.
In a statement obtained by Business Post, it was explained that the stable outlook reflects expectations that the firm’s strong market position will continue to drive solid growth and sustain the recent earnings recovery; to the extent that this translates into higher internal cash flows, there would be less recourse to debt.
GCR said it also expects “ongoing financial and technical support from Heineken to continue if improvements do not materialise.”
Heineken group’s entities have a track record of providing technical support to Nigerian Breweries and have been instrumental in input sourcing.
The brewer is 73 per cent owned by Heineken and the two businesses share some branding, though its financial contribution to the ultimate group remains modest, accounting for approximately 2 per cent of its assets and revenue as of 2024.
Nigerian Breweries returned to profitability after two consecutive years of net losses. Following the successful rights issue of N548.9 billion, the organisation has evidenced much lower debt, underpinning an improvement in leverage metrics.
The company’s competitive assessment remains a key rating support, driven by its well-entrenched position as Nigeria’s leading beer producer, with over 50 per cent market share and substantial production capacity.
Its business profile is further strengthened by a robust customer base, wide distribution network, and strategic support from its parent company, Heineken.
The brand portfolio spans various value tiers within the alcoholic and non-alcoholic segments, whilst its expansion beyond beer, marked by the recent acquisition of Distell Wines and Spirits Nigeria Limited, has increased its product offerings to about 30 brands from 20.
To reduce the high reliance on imported inputs and mitigate the effect of currency risk on profitability, the brewery firm has renewed its focus on local sourcing initiatives and strengthened partnerships with local farmers and suppliers of sorghum as a key raw material.