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This brewer keeps struggling to win as Nigeria’s beer war rages on 

Champion Breweries Plc, a Nigerian brewer keeps lagging behind in the midst of actual champions, thereby calling its rather powerful name into question.



This brewer keeps struggling to win as Nigeria’s beer war rages on 

As Africans, we are taught that names are powerful. Many people believe this, which explains why a lot of thinking goes into naming a child or a new business venture. While this is a good thing to do, it often becomes puzzling when names are the direct opposite of reality. Case in view is Champion Breweries Plc, a Nigerian brewer which keeps lagging behind in the midst of actual champions, thereby calling its rather powerful name into question. But this could change. 

Champion Breweries Plc is Nairametrics’ company focus for the week. As always, we chose to profile the brewer mainly because it is little-known. There are many of such companies that are listed on the Nigerian Stock Exchange and ever so often, Nairametrics tries to shine the spotlight on them for the benefit of investors who may be looking for where to invest. 

On that note, get to know all there is to know about Champions Breweries: its history, business model, target market, ownership structure, the influence of competitors, as well as financials.  

[READ MORE: Beer Wars: International Breweries takes number 2 market share from Guinness Plc]

About Champion Breweries Plc: a corporate overview 

Initially known by the name South East Breweries Limited following its incorporation in 1974, the Uyo-based brewer has since gone through a series of corporate changes and rebranding. At some point, it became known as Cross River Breweries Limited, after which it transformed to Champion Breweries Limited. In 1992, the company became a public limited company in preparation to become a quoted company on the Nigerian bourse. The listing of the company’s shares on the NSE took place on September 1st, 1993. 

According to information available on the Nigerian Stock Exchange’s website, Champions Breweries Plc has a total market capitalisation of about N10.8 billion. This is far less than the market caps of its major competitors. Similarly, its share price of N1.38 is far below that of its major competitors who shall be named shortly. 

This brewer keeps struggling to win as Nigeria’s beer war rages on 

Champion Breweries’ business model 

As a going concern, the brewer generates most of its revenue through the production and distribution of a range of alcoholic and non-alcoholic beverages. Asides producing its own products, Champion Breweries Plc also engages in contract brewing, which basically entails the provision of production and packaging services to other breweries for a fee. Two of the company’s only known brands are 

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  1. Champion Lager Beer, and 
  2. Champion Malta 

The company’s target market 

Just like every other brewer in Nigeria and beyond, Champion Breweries Plc targets beer lovers, as well as lovers of non-alcoholic beverages such as malt drinks. However, while the other leading Nigerian brewers tend to have wider target markets, Champion Breweries seems contented with focusing on consumers in the South-South and South-East parts of the country. This has been the case since its inception in the 1970s. 

Champion Breweries’ ownership structure 

After many corporate transformations and changes in ownership structure, the brewer is currently majority-owned by Raysun Nigeria Limited, a wholly-owned subsidiary of Heineken International BV. Information contained in the Nigerian brewer’s 2018 audited financial report indicates that Raysun Nigeria Limited owns a total of 4,729,434 units of shares, which represents 60.4% shareholding. The interesting thing is that Heineken International, besides owning Raysun Nigeria Limited, also has majority stake in one of Champion Breweries’ biggest competitors. 

Anyway, a further breakdown of Champion Breweries Plc’s ownership structure indicates that the Akwa Ibom State Government holds some 10% shareholding, while an Assets Management nominee holds 12.3%. Other shareholders comprise mostly retail investors, who own the remaining 17.3% shareholding. 

[READ ALSO: Nigerian Breweries: Cost pressures strain H1 2019 performance]

A quick look at the company’s top executives 

  • Dr. Elijah Akpan: Chairman 
  • Mr. Patrick Ejidoh: Managing Director 
  • Mr. Hendrik van Rooijen 
  • Mr. Marinus Gabriels  
  • Mr. Samson Aigbedo 
  • Mrs. Helen Umanah 
  • Mr. Thompson Owoka 
  • Alhaji Shuaibu Ottan 
  • Mr. Samuel Onukwue 

Facing the competitors 

Nigerians are famous for their love for all things alcohol, especially beer. This explains the availability of quite a handful of brewers across the country. Five of these brewers are listed on the country’s stock market and they include Nigerian Breweries Plc, Guinness Nigeria Plc, International Breweries Plc, Golden Guinea Breweries Plc, and of course, Champion Breweries Plc.  

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The scorecard for the companies half-year 2019 performances shows that Nigerian Breweries generated the biggest revenue of N170.1 billion, followed by a profit after tax of N13.3 billion. Guinness Nigeria Plc, whose full-year normally ends June 30th of every year due to its unique accounting process, recorded revenue of N67.7 billion. The company’s profit after tax for the period stood at N1.7 billion. Meanwhile, International Breweries Plc reported revenue of N68.6 billion for the period under review but ran at a loss of N6.8 billion. Lastly, Champion Breweries Plc reported revenue of N1.6 billion and a profit after tax of N99.1 million. 


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Making sense of the situation 

It is important to reiterate that Champion Breweries Plc is a traditionally small company which has always focused on the South East region. The company’s decision to remain small could be a strategic move by Heineken International to ensure that it does not unnecessarily compete with Nigerian Breweries. This could explain why it has limited product lines, whilst focusing much of its energy on contract production for Nigerian Breweries.  

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Should Nigerian Breweries buy Champion Breweries Plc? 

This could make sense, considering that both companies are already owned by the same entity – Heineken. Moreover, Champion Breweries is already in charge of producing a considerable amount of NB’s products. But while this may seem like a possible option, it is important to note that Champion Breweries’ products have achieved brand loyalty in the South East region where the company has operated for over forty years. Maintaining this brand loyalty is important no matter how small it may seem. 

[READ FURTHER: Investors in Budweiser’s International Breweries wail as N163 billion is wiped out of market…]

More so, part of Heineken International’s strategic move may be to allow Champion Breweries keep producing its cheaper beer and malt brands as a way of checkmating competition from the likes of Guinness Nigeria Plc and International Breweries Plc. After all, as we’ve noted earlier, people in the South East are already familiar with Champion Lager Beer and Champion Malt. It would be unwise to halt its production whilst possibly giving competitors the chance to take over that market share. 


Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs.He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor.Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan.If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Secret behind MTN’s blistering performance

Despite COVID-19 disruptions, MTN Nigeria’s 2020 financials showed marked improvements compared to its 2019-year-end.



NCC, MTN’s parent company faults regulator’s recommendation for data price reduction, MTN Nigeria reacts to poor internet as network issues go beyond Nigeria 

MTN Nigeria Communications Plc (MTN Nigeria) released its audited financial results for the financial year ended December 31, 2020.

Despite a challenging 2020 to individuals and businesses caused by COVID-19 disruptions, MTN Nigeria’s financial and non-financial information showed marked improvements compared to its 2019-year-end as well as prior quarters of 2020 results that were impacted by the COVID-19 pandemic.

Indeed, the evolving pandemic which intensified lockdown, remote working, and work-from-home procedures, appeared to have led to increased adoption of MTN Nigeria data and digital services.

Specifically, year-on-year on non-financial information, mobile subscribers increased by 12.2 million to 76.5 million; active data users increased by 7.4 million to 32,6 million while the company’s mobile money business continued to accelerate with a 269.2 % increase in the number of registered agents to over 395,000 and 4.7 million active subscribers from approximately 553,000 in 2019.

Year-on-year on financial information, service revenue increased by 14.7 % to NGN1.3 trillion driven principally by voice (with revenue growth of 5.9 %) and data revenues (rising by 52.2 % led by increased data use and traffic); profit before tax (PBT) grew by 2.6 % to N298.9 billion; profit after tax (PAT) increased by 0.9 % to N205.21 billion; while Earnings per share (EPS) rose by 0.9 % to N10.1 (N9.93, 2019).

Nonetheless, significant increases were noted in its operating expenditure as well as capital expenditure. First, there was a 2.3 % increase in operating expenses arising from the rollout of new sites and the impact of naira currency depreciation affecting the costs of MTN Nigeria lease contracts. Secondly, EBITDA margin declined by 2.5 %age points to 50.9 % (from 53.4 % in 2019) There were also other significant cost rises including a 25.4 % increase in net finance cost, and 19.4 % increase in capital expenditure which had a 11.7 % knock-on increase in depreciation and amortization costs.

On the back of the year-end result, MTN Nigeria has proposed a final dividend per share (DPS) of N5.90 kobo per share to be paid out of distributable income and brings the total dividend for the year to N9.40 kobo per share, representing an increase of 18.7 %. MTN Nigeria paid N4.97 as final dividend for the year ended December 31, 2019. This was in addition to an interim dividend of N2.95, which brought its total 2019 dividend to N7.92 per share.

The proposed dividend implies a yield of 3.4%. Having paid an interim dividend of NGN3.50 in 2020, the proposed dividend, if approved, will bring the total dividend per share to NGN9.40 or c.19% higher compared with 2019.  We expect a positive reaction from the market due to the marked improvement in earnings. However, the market’s reaction may be dampened by negative investor sentiments on equities arising from the uptick in yields on fixed-income securities.

We expect that the introduction of additional customer registration requirements requiring subscriber records are updated with respective National Identity Numbers (NIN), and the continued suspension of the sale and activation of new SIM cards will affect subscriber growth.

MTNN share price remains unchanged at the end of trading yesterday at N174 per share.


Tade Fadare PhD, is an economist, and a professionally qualified accountant, banker and stockbroker. He has significant experience working or consulting for financial institutions in Europe, North America, and Africa.

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How does a bank make N19 billion a month?

The strategy for banks globally is to attract deposits at a lower rate than it lends out to borrowers.



How does a Financial Services Group make N19b a month, post a Profit After Tax figure of N230b in an environment where global commerce virtually ground to a halt in 2020?

The Zenith Bank Plc (Zenith) Year-end 2020 final results are a blockbuster, not just in the quantitative, but the qualitative as well. In all major headline numbers, Zenith posted growth on a Year-on-Year basis, specifically, Gross Earnings are up 5.2%, Net Interest Income up 12%, Customer deposits up 15.3%.

Somehow Zenith grew her loan book by 18% in a recession and reduced the volume of Non-Performing Loans in the same period. Zenith was also able to post a higher revenue number from non-interest income even as yields on fixed-income fell across Nigeria. I must stress, Zenith has posted these results by servicing her target segment of the high-end corporates in Nigeria.

READ: Union Bank Nigeria Plc posts N15.9 billion profit in 9M 2020, up by 2%

So how did Zenith achieve this? I want to do a deep dive into how to make profits in a recession. However, it is important to start with a background on how banks make money which is basically in two ways;

  • Interest income: which is income generated from the bank gathering deposits from customers and investors and “renting” out these funds to individuals and corporates for a fee called interest. Interest Income is seen as the main business of banks. It is a measure of how well the bank has fine-tuned its people, process, and systems to generate returns from a commodity called cash.
  • Non-Interest Income: This is the income the bank generates from deploying its brands and people to juice revenues from activities that do not necessitate a transfer of cash. For Example, a bank asset management business leverages the bank’s skillsets to earn fees by providing investment advice to clients. Does a business want to expand? The bank can advise on the process to make that happen.

READ: Zenith Bank spends N20 billion on IT in 2020, up 122%

The strategy for banks globally is to attract deposits at a lower rate than it lends out to borrowers. This allows the bank generate a spread between cost and revenue. The bank’s interest spread can be magnified by the number of quality loans it creates as Interest Income rests also on the quality of the loan book. Positive spread drives the funding of other banking services and is supported by the banks internal competencies to manage risk

So a bank makes profits by

  1. Attracting cheap deposits
  2. Earning positive spread
  3. Providing value addition for a fee
  4. Effective Risk Management

All these have to happen simultaneously. A bank that sources expensive deposits by paying higher rates generates a lower spread. Lower spread exposes the bank to cost overruns and will prove fatal to long-term growth.

READ: Zenith USSD banking transaction value rises by 30.8% Y-o-Y to hit N497.29 billion

With this in mind, let’s review Zenith FY 2020 Performance

  • Attracting Cheap Deposits: In 2019, Zenith’s total interest expense, which represents how much it paid to get deposits was N148b, that figure dropped in 2020 to N121b. this means the bank was able to grow deposits by 25% but at a lower cost. How? Zenith changed her deposit mix, reducing borrowed funds/leases and time deposits by 41% and 38% respectfully and increasing the share of current accounts by 155%. By swapping the deposit mix, the bank’s cost of funds ratio fell by 18mn%.
  • Earning Higher Spread: Zenith grew Net Interest Income by 12.2% in 2020. This figure represents income earned from the deposits and investments of the banking group. Again, this was achieved by asset mix reorganization. In the face of falling rates especially on shorter-dated FGN instruments, Zenith shifted allocation from Treasury bills to longer-dated FGN bonds which paid a higher yield. Zenith’s Non-interest Income also grew to N275b a 5% jump from 2019. This is driven largely by extraordinary items including foreign currency revaluation gain, which is the gain realized from the revaluation of foreign currency-denominated assets. I must highlight this. Zenith was able to post a gain of about N43b which is a 256% gain from FY 2019 based on the Naira being devalued to the US Dollar.
  • Providing Value Addition: Value addition will include all non-core banking services Zenith Group provides to the public including subsidiaries like the Zenith Penson Custodians which has N4t in assets under custody. Commission on agency and collection was a big contributor to Zenith’s non-core banking revenue.
  • Risk Management: Zenith was efficient in deploying its internal competencies to minimize and avoid risk and impairments from the ordinary and extraordinary course of business. Zenith like other financial institutions saw a pullback in commercial activities from her clients. Take the Commerce subsector, the Non-Performing Loan share in that sector grew from 9% to 24%. Zenith, booked an increase in the number of NPLs by volume to N125m in FY 2020 but the bank was able to keep the NPL ratio down to 4.29%. An extraordinary feat.

Overall, the bank was able to navigate a difficult year and post a good return and a handsome dividend of N3 to investors. Zenith was able to achieve all this while increasing the staff strength by 4.6% to 7555 employees.

However, there are red flags as well:

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  • Net Interest Margin was down in FY 2020 as yields declined. If yield continues to stay muted, can Zenith keep finding profitable avenues to invest that N5.34 deposit base?
  • Interest income positive in FY 2020 at 420b but when compared to 2017, interest income is falling.
  • If you ignore the revaluation gain, then Non-Interest income will be considerably muted, possibly negative in FY 2020
  • Fees on electronic products fell 36% in an environment where online banking has been not just sound business practice, but life-saving as well.

Overall, in an environment with months of local and international shutdowns, Zenith has posted good numbers and demonstrated it is possible to eke out gains from a hard environment. When one looks at the dividend yield, P.E. Ratio of the bank, for me, this is a Buy.


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