Nigerian Breweries Plc generated N76 billion in productivity gains in the first half of 2026, helping the company absorb rising operating costs, strengthen cash flow and completely eliminate its outstanding borrowings.
The company’s Finance Director, Maria Karaseva, disclosed this during an investor call on the brewer’s financial and operational performance for the six months ended June 30, 2026.
Karaseva said the productivity programme contributed to a two-percentage-point improvement in the company’s gross profit margin despite persistent inflationary and operating cost pressures.
She said the gains also translated into stronger cash generation, enabling the company to repay all its outstanding loans during the period.
Nigerian Breweries recorded N73 billion in net free operating cash flow in the first half of the year, representing a 264 per cent increase compared with the corresponding period in 2025.
The brewer consequently ended the reporting period with zero borrowings.
Karaseva attributed the improved cash position to tighter working capital management, productivity measures and greater focus on cash conversion across the business.
“Our focus throughout the period was to strengthen cash generation and build a more resilient financial position.
“By improving our cash conversion, managing working capital more efficiently, and translating productivity gains into cash, we generated N73bn in net free operating cash flow, fully repaid our loans, and returned retained earnings to positive territory,” she said.
The company also reported more than N1 trillion in net revenue during the six-month period, while its asset base remained around N1 trillion.
Despite the challenging operating environment, Nigerian Breweries recorded an 18 per cent year-on-year increase in profit before tax, supported by improved gross margins and productivity gains.
Karaseva said the productivity programme had helped the company cushion the impact of inflation and other cost pressures linked to the Middle East crisis.
“Our productivity programme delivered N76 billion in gains, which helped offset the impact of Middle East-related inflation in Nigeria and improved our gross profit margin by two percentage points,” she said.
“More importantly, those gains translated into stronger cash flow, giving us the capacity to eliminate our borrowings and significantly improve the health of our balance sheet.”
The brewer’s return to positive retained earnings also marks an improvement in its financial position following years of pressure from rising input costs, foreign exchange challenges, inflation and other macroeconomic headwinds.
The elimination of its borrowings is expected to reduce its exposure to high interest rates and ease finance-cost pressures on its cash flows.
Nigerian manufacturers have continued to face elevated energy, logistics, packaging and raw material costs, alongside foreign exchange volatility and broader inflationary pressures.
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Against this backdrop, the brewer said it would continue to focus on cost discipline, cash management, productivity, volume growth, innovation and operational efficiency in the second half of the year.
The company also plans to reduce its exposure to foreign exchange risks and deploy further operational efficiencies to mitigate the impact of inflation and high production costs.
With zero borrowings, stronger free operating cash flow and positive retained earnings, Nigerian Breweries enters the second half of 2026 with a significantly stronger balance sheet, even as the broader Nigerian operating environment remains challenging.