Nigeria’s consumer giants squeeze out bigger profits as shoppers pull back

Nigeria’s biggest consumer-goods companies posted sharp profit gains in the first nine months of the year even as shoppers bought less. That divergence underscores how unevenly the country’s economic recovery is being felt.

Nestle Nigeria Plc’s pretax profit rose 52% to 193.9 billion naira ($146 million), while Guinness Nigeria Plc’s climbed 55% and Nigerian Breweries Plc’s 33%.

Six of seven listed consumer companies reviewed by Nairametrics grew revenue more slowly than the 14.6% inflation rate, meaning they sold fewer goods in real terms. Five of them still raised profit by 18% or more.

Corporate gains, household strain

The results show the gains from President Bola Tinubu’s overhaul of the economy are reaching corporate balance sheets faster than household budgets.

A firmer naira and cheaper raw materials cut costs for manufacturers, but about 63% of Nigerians were living in poverty in 2025, according to the World Bank, up from 56% two years earlier.

• “Consumer disposable income remained constrained,” Nigerian Breweries, the local unit of Heineken NV, said in its results statement. Its volumes fell in the third quarter, and quarterly revenue slipped 3% to 299 billion naira. Nine-month sales rose just 5.4%, yet pretax profit reached 171.7 billion naira.
• The pattern runs across the sector. Nestle’s revenue grew 10.4% to 976.5 billion naira, a fraction of its profit growth. International Breweries Plc grew sales 2.1% but profit 22%. NASCON Allied Industries Plc’s revenue was flat while its profit rose 19%. Cadbury Nigeria Plc was the only company whose profit grew more slowly than its sales.
• BUA Foods Plc’s cost of sales dropped 34% on lower raw-material and energy costs, lifting profit 11% to 480.5 billion naira even as revenue fell 19% to 1.15 trillion naira. Its gross margin widened to 48.3% from 36.7%.

The company said lower sugar and rice sales reflected “strategic and competitive market pricing initiatives,” while flour suffered from “softer demand.” Rice revenue more than halved, while pasta, a cheaper staple, grew 32%.

Cheaper finance, uneven growth

Cheaper borrowing did the rest. Nestle’s net finance costs shrank to 14.3 billion naira from 53.4 billion naira as the currency stabilized at about 1,329 per dollar, from 1,475 a year earlier. Guinness’s finance costs fell to 5.8 billion naira from 15.3 billion naira, and Nigerian Breweries’ interest expense fell to 3.2 billion naira from 37.4 billion naira.

• Companies are spending more to keep customers. Nestle’s consumer promotions jumped 64% to 60.8 billion naira, and Cadbury’s selling and distribution costs more than doubled to 20 billion naira. Nigerian Breweries raised advertising and sales spending by 18%, and International Breweries lifted advertising, promotion and distribution costs by 37%.
• Cement makers and MTN Nigeria Communications Plc were the exception. Their sales outpaced inflation, driven by government infrastructure spending and rising data use rather than consumer spending. Dangote Cement Plc’s revenue rose 19.6% and pretax profit 41.5%, while BUA Cement Plc’s profit jumped 64%.
• Lafarge Africa Plc’s sales rose 18.9%, which it credited to higher volumes and better distribution. Dangote said its Nigerian volumes rose 6.4%, “primarily driven by increased government infrastructure projects, housing development, a stronger private-sector project pipeline.” MTN’s revenue climbed 23.6% as data sales rose 35.8% and subscribers reached 94.7 million.

Investors appear unconvinced the consumer gains will last. The NGX Consumer Goods Index slipped 1.09% in October as results rolled in, while the Industrial Goods Index, home to the cement makers, rallied 16.85%. Nestle and Nigerian Breweries each fell about 5% over the month. Guinness, the only consumer company whose sales outpaced inflation, gained 9.9%.

Balance sheets are nonetheless healing after the losses of the 2023–2024 currency crisis. Nestle’s shareholders’ equity rose to 116.3 billion naira from 12.9 billion naira in December. Nigerian Breweries posted a third-quarter profit of 21 billion naira, compared with a 4 billion-naira loss a year earlier. Nestle said it has now been profitable for eight straight quarters since returning to profit at the end of 2024.

• The outlook for consumers remains difficult. Headline inflation eased to 14.6% in September from 21% a year earlier, but food inflation held at 19.6%, the statistics bureau said. Petrol prices have climbed to as much as 1,395 naira a litre from about 830 naira before the Middle East conflict escalated in February.
• The N70,000 minimum wage hasn’t changed since 2024, leaving a monthly salary able to buy about 50 litres of fuel, down from 84. The World Bank said in April that household incomes “have not grown fast enough to offset still-elevated inflation,” and it does not expect poverty to fall to 59% until 2028.
• Costs are creeping back for companies too. Distribution expenses rose 29% at Nigerian Breweries and 20% at Guinness as fuel prices climbed, and staff costs across 18 non-bank listed firms tracked by Nairametrics rose about 42%.

The central bank cut its benchmark rate by 3.5 percentage points to 23% in September, a move Dangote Cement described as the biggest single cut in the bank’s history. That may help revive demand, but the margin gains that powered this year’s profits will be harder to repeat. For 2027, the test is whether these companies can sell more, not just earn more from less.