Nigeria | NGX

International Breweries’ Q1 2024 unaudited numbers showed Revenue growth of 89.7% y/y to N103.22bn from N54.39bn (Q1 2023). On a q/q basis, Revenue was up 34.4% from N76.82bn in Q4 2023. We believe the topline growth was mainly driven by the c.23.5% price increase across product segments of the business in the quarter. The Cost of Sales (ex-depreciation) grew faster than Revenue, up 114.8% y/y to N66.79bn (Q1 2024) from N31.09bn (Q1 2023). Consequently, Gross Margin declined to 35.3% from 42.8% (Q1 2023). Although, Gross Profit was up 56.3% y/y to N36.43bn from N23.31bn in Q1 2023.

In Q1 2024, Nestle reported its Revenue went up 43.4% y/y and 21.9% q/q to N183.48bn from N127.97bn in Q1 2023 and N150.53bn in Q4 2023. Cost of Sales (adjusted for depreciation) rose significantly to N132.49bn (+78.0% y/y) in Q1 2024 from N74.41bn in Q1 2023. This led to a drop in its Gross Profit to N51.00bn (-4.8% y/y) in Q1 2024 from N53.56bn in Q1 2023 allowing for a Gross Profit Margin of 27.8% (-14.1ppts) from 41.9% in Q1 2023.

In its recently released unaudited Q1 2024 results, MTN Nigeria sustained its Revenue growth momentum, reporting a 32.5% y/y growth in Revenue to N752.98bn from N568.14bn in Q1 2023. On a q/q basis, Revenue increased by 8.2% from the N695.90bn recorded in Q4 2023. The growth in Service Revenue (up 32.0% y/y) remained the major driver of the rise in Total Revenue.

In its recently released unaudited Q1 2024 results, Lafarge Africa reported a 50% y/y Revenue growth to N137.77bn in Q1 2024 from N91.82bn in the prior period (Q1 2023). Similarly, on a q/q basis, Revenue was up by 18.3% from N116.42bn in Q4 2023. The broad-based growth in cement sales (up 49.14% to N133.42bn), aggregate and concrete sales (up 84.43% to N4.18bn), and other products (up 76.81% to N179m) contributed to the rise in topline growth in Q1 2024. While no information has been provided on the Revenue breakdown, we attribute the company’s top-line growth to a mix of price and volume growth.

In its recently released unaudited Q1 2024 results, BUA Cement reported a 51.5% y/y Revenue growth to N161.13bn in Q1 2024 from N106.35bn in the prior period (Q1 2023). Similarly, on a q/q basis, Revenue was up by 29.8% from N124.14bn in Q4 2023. While no information has been provided on the Revenue breakdown, we attribute the company’s top line growth to increases in both price and volume.

International Breweries showed repressed performance across key metrics in 2023. The renowned trophy lager brewer recorded Revenue growth of 19.2% y/y to N260.6bn, amidst the nation’s high inflation which has weakened consumer purchasing power. Throughout the year, sales volume remained sluggish as consumers adjusted their spending patterns toward essential items. Nevertheless, and in line with our expectation, there was a slight uplift in demand during the holiday season, offering a modest cushion to overall sales volume. This was evident in the fourth quarter, where sales soared by 38.3% to N80.5 bn, compared to the preceding quarter.