Nigerian Breweries Plc and Nestlé Nigeria Plc, two prominent consumer goods entities listed on the Nigerian Exchange (NGX), have released their 2025 audited results, revealing a faster-than-expected recovery. After enduring significant headwinds from the naira devaluation crisis in 2023 and 2024, both companies have returned to profitability, capturing investor attention. The critical question remains: is this recovery sustainable, and should investors consider buying or holding these stocks?
Both companies faced severe challenges in 2023 and 2024, primarily due to foreign exchange volatility and rising borrowing costs. Despite consistent consumer demand, they struggled to convert revenue growth into profits. These financial pressures led to substantial accumulated losses, forcing both to suspend dividends after the 2022 financial year. In 2025, Nigerian Breweries posted a profit after tax of N99 billion, a stark reversal from the N145 billion loss in 2024. The company sustained its upward momentum, achieving N55.9 billion profit in Q1 2026—a 26% increase compared to Q1 2025, representing over half of its total 2025 profit in a single quarter.
Key drivers for Nigerian Breweries included aggressive deleveraging, reducing total borrowings from N341.6 billion in 2023 to N59.7 billion in 2025, and further to N56.1 billion by Q1 2026. While top-line performance remained steady during the crisis, revenue growth also contributed to the recovery. Nestlé Nigeria mirrored this trajectory, posting a profit after tax of N104.97 billion in 2025, compared to a loss of N164.6 billion in 2024. Its recovery was driven by zero foreign exchange losses and balance sheet deleveraging, which reduced finance costs.
The market has responded with optimism, reflected in elevated valuation multiples. Investors are no longer pricing these stocks as distressed assets but are valuing them based on growth potential and recovery. Despite strong price gains, neither stock is in oversold or overbought territory. Given the robust recovery, high expectations, and positive momentum, both companies appear to have further room for growth in the short-to-medium term. However, the risk of immediate setbacks remains, as external factors like Efcc Arraigns Sarumi and Anambra Poll: Awka developments could influence market sentiment. Additionally, Enroll Voter Cards initiatives and Ptml Customs Generates revenue trends may affect broader economic conditions. The ongoing issue of Fg Indebtedness Gencos also underscores fiscal challenges that could impact consumer goods sectors.
