Debt levels among Nigeria’s listed corporates showed mixed patterns in the first half of 2025.
Some companies aggressively expanded leverage to fund growth and operations, while others reduced borrowings in response to margin pressures and higher finance costs.
Nigeria’s corporate debt landscape in H1 2025 reveals a sharp divergence between aggressive borrowing by some firms and strategic deleveraging by others.
Total borrowings across key listed companies highlight both sectoral pressures and growth-driven capital deployment.
Oil and gas operators like Oando Plc and Seplat Energy Plc expanded their debt significantly to fund upstream projects and restructuring, while Dangote Cement maintained high leverage to support capacity expansion.
In contrast, consumer-facing giants like Nigerian Breweries and Nestlé Nigeria scaled back borrowings to preserve margins amid inflationary and foreign-exchange headwinds.
The debt ratios provide further insight: negative equity positions at Oando, Nestlé, and MTN Nigeria flag balance sheet risks despite strong or improving operating cash flows, while firms like BUA Cement, Transcorp, and Beta Plc display disciplined leverage and robust interest coverage.
This mix of aggressive borrowing, conservative funding strategies, and balance-sheet recalibration underscores the varied approaches Nigerian corporates are taking to navigate volatile macroeconomic conditions, high interest rates, and capital-intensive growth plans.
Below is a breakdown of each company’s debt position, growth trend, and structure.
Nestlé scaled back debt by 11.43%, from N653.92 billion in H1 2024 to N579.19 billion in H1 2025.
- Current debt: N63.36 billion
- Non-current debt: N515.83 billion
Nestlé Nigeria Plc shows a highly leveraged and structurally imbalanced capital position. As of H1 2025, the company reported total borrowings of N579.19 billion, backed by N37.40 billion in cash and cash equivalents, resulting in net debt of N541.79 billion, a substantial level relative to its operating scale and earnings.
Its debt-to-equity ratio of -13.88x and asset-to-equity ratio of -21.56x reflect a negative equity position, meaning liabilities exceed shareholders’ funds. This suggests accumulated losses or substantial debt exposure, leaving the balance sheet heavily debt-driven. The debt-to-capital ratio of 1.08x confirms that debt comprises nearly all of its capital base, a level far above typical industry norms.
The company’s debt-to-EBITDA ratio of 3.90x indicates that nearly four years of operating earnings would be required to repay its borrowings—significantly higher than peers, pointing to a heavier repayment burden. Its interest coverage ratio of 3.02x, while positive, shows thinner earnings headroom relative to interest costs compared to more conservatively financed competitors.
Overall, Nestlé Nigeria’s leverage profile highlights elevated financial risk despite continued operational earnings strength. While its cash flows currently support interest obligations, the negative equity position underscores the importance of careful balance sheet management and potential recapitalization efforts to restore a healthier capital structure over the long term.
