International Breweries Plc recorded a 21.86% increase in pre-tax profit to N90.44 billion for the nine months ended September 2026, but a sharp increase in income tax expenses reduced profit after tax by 5.74% to N54.51 billion.
The company’s unaudited nine-month 2026 financial results filed with the Nigerian Exchange (NGX) on Monday, October 26, 2026 showed revenue increasing marginally by 2.12% to N482.61 billion from N472.57 billion in the corresponding period of 2025.
Despite improved operating profitability, earnings per share declined to 32 kobo from 34 kobo, reflecting the impact of higher taxation on shareholders’ earnings.
Cost savings lift Gross Profit:
International Breweries recorded stronger gross profitability during the nine-month period, supported by lower production costs despite modest revenue growth.
- Cost of sales declined by 8.02% to N286.67 billion, lifting gross profit by 21.76% to N195.94 billion and improving gross margin to 40.61% from 34.05%.
- Materials consumed and allocated overheads declined by 14.35% to N222.83 billion, contributing significantly to the reduction in production costs.
- Realised foreign exchange losses narrowed by approximately 36% to N8.63 billion, providing additional support for earnings.
- Operating profit increased by 20.66% to N80.86 billion, reflecting the improvement in gross profitability.
However, administrative, marketing and distribution expenses increased by 26.13% to N116.16 billion, with advertising, promotion and distribution costs rising by 36.68%.
The improvement in operating profit indicates that cost savings outweighed the pressure from rising selling expenses, even as revenue growth remained relatively weak.
Tax Expense jumps 119%:
The company’s improved operating performance was supported by stronger net finance income, which increased by approximately 33% to N9.58 billion.
- Finance income of N19.63 billion exceeded finance costs of N10.05 billion, contributing to the increase in pre-tax profit.
- Income tax expense surged by 119.25% to N35.93 billion from N16.39 billion, absorbing much of the improvement in pre-tax earnings.
- Nairametrics previously reported a similar trend in the first half of 2026, when pre-tax profit rose by 21.55% while profit after tax declined by 7.21%.
- Based on the difference between the half-year and nine-month results, third-quarter pre-tax profit stood at approximately N15.65 billion, compared with N12.71 billion in the corresponding quarter of 2025.
Cash generated from operations increased to N121.10 billion from N38.42 billion, while net operating cash flow reached N114.43 billion.
Capital expenditure stood at N85.13 billion, broadly in line with the previous year, while the company reported no outstanding bank loans or overdrafts as of September 30, 2026.
N84 Billion Capital Return reduces cash:
International Breweries’ cash and cash equivalents declined by 33.27% to N103.74 billion as of September 2026, compared with N155.45 billion at the end of December 2025.
The decline followed significant financing outflows, including the company’s N84 billion return of capital to shareholders.
- Net financing cash outflows reached N99.71 billion, with the capital return accounting for most of the amount.
- Nairametrics previously reported that the qualification deadline for the capital return was September 16, 2026, with payment scheduled for September 23.
- Total shareholders’ equity declined by 5.90% to N470.33 billion, reflecting the impact of the capital return.
- At the half-year, International Breweries held N171.08 billion in cash and equivalents, including N115.80 billion in short-term investments, according to an earlier Nairametrics review of consumer goods companies’ cash holdings.
- The September cash decline therefore followed a substantial shareholder payout from an earlier large cash position, although differences in reporting classifications should be considered when comparing the figures.
- The company’s ownership disclosures also showed AB InBev Nigeria Holdings BV’s reported stake increasing to 96.01% from 78.44%, while Brauhaase International Management GmbH’s stake declined to 1.41% from 8.85%.
With their reported share counts unchanged and combined substantial holdings remaining at 97.42%, the changes appear to reflect reclassification rather than additional share purchases.
Accumulated losses restrict dividend payments:
International Breweries’ improving profitability has not fully translated into higher earnings per share or ordinary dividend payments, partly because of accumulated losses from previous years.
Nairametrics previously reported that the company had accumulated losses of N191.03 billion at the end of 2025 and proposed a share capital reduction to restore distributable reserves.
- The proposed restructuring remains important to the company’s ability to resume ordinary dividend distributions, despite the improvement in operating earnings.
- International Breweries’ share price declined by approximately 2.76% to N8.80 on Monday, October 26, from N9.05 on Friday, October 23, following the release of its results.
- The stock has lost approximately 37.14% of its value from N14 at the beginning of 2026, representing a decline of N5.20 per share.
- The shares have also declined by approximately 9% since September 24, reflecting continued weakness in the company’s market performance.
For investors, the results present a contrast between improving operating margins, stronger cash generation and the absence of bank debt, against relatively flat revenue, rising selling expenses and a higher tax burden.
The company’s fourth-quarter tax expense and progress on its proposed capital reduction will remain important factors in determining whether improved pre-tax profitability translates into stronger returns for shareholders.