NB, HBM, Nestlé Nigeria, others book N129.4 billion in fees and royalties paid to parent

Seven foreign-owned companies on the Nigerian Exchange that disclose the figures booked N129.4 billion in royalties, licence, technical and management fees to their parent groups in the nine months through September.

That is up 7.7% from N120.1 billion a year earlier, according to their unaudited third-quarter filings.

At three of them — HBM Nigeria, International Breweries and Nigerian Breweries — the fees grew faster than revenue, roughly ten times as fast in International Breweries’ case.

At Nestlé Nigeria, the fees plus interest on a loan from its Swiss parent exceeded the profit left for all shareholders.

The payments are legal and approved by Nigeria’s technology-transfer regulator, NOTAP, which typically caps such fees as a share of net sales. But they land as the subsidiaries emerge from two years of currency losses that wiped out shareholders’ equity at four of them and forced parents to inject fresh capital or forgive loans.

Nestlé’s parent out-earns its shareholders

Nestlé Nigeria, 70.81% owned by Switzerland’s Société des Produits Nestlé SA, charged N34.8 billion in general licence fees in the nine months, up from N32.3 billion. It booked another N16.5 billion in shared-service costs from Nestlé Central and West Africa. Together, that is N51.2 billion, or about 5.2% of revenue — the highest ratio in the group.

• On top of that, the company paid N58.5 billion in interest on its intercompany loan, which makes up the bulk of its N426.3 billion of borrowings. Fees and loan interest together came to roughly N110 billion. Profit after tax for all shareholders was N103.4 billion.
• The company’s results were otherwise its strongest in years. Revenue rose 10.4% to N976.5 billion and pretax profit jumped 52% to N193.9 billion. Chief Executive Wassim Elhusseini called it the company’s “eighth consecutive quarter of profitability since returning to profit in Q4 2024.”

Shareholders’ equity climbed to N116.3 billion from N12.9 billion in December. Two years ago it was negative N112.1 billion, after naira devaluation inflated its foreign-currency loans. Separately, its parent plans to move the Nigerian waters and premium-beverages business into Peranel, a 50-50 joint venture with Platinum Equity, subject to shareholder and regulatory approval.

Fees outrun sales

At HBM Nigeria, the former Lafarge Africa now controlled by China’s Huaxin Building Materials, technical service fees rose 28% to N21.7 billion. Revenue rose 19%. The agreement sets the fee at 3% of net sales, subject to a ceiling of 5% of Ebitda.

• International Breweries, 97.4% held by Anheuser-Busch InBev group companies, paid N11.7 billion in technical management fees, up 23%. Its revenue grew 2.1%. Nigerian Breweries, the Heineken subsidiary, booked N28.9 billion in royalties and technical service fees, up 12%, against revenue growth of 5.4%. Nigerian Breweries said volumes fell in the third quarter.
• Not all of the money has left the country. Nigerian Breweries’ balance owed to Heineken and its affiliates for fees and royalties stood at N90.6 billion at the end of September, up from N55.4 billion a year earlier. HBM owed Huaxin N29 billion in technical fees, up from N6.6 billion in December. Both figures point to fees that have accrued faster than they have been paid out, leaving a cash outflow still to come.

Debt cleared, with the parents’ money

The rise in fees comes after parents spent heavily to repair their subsidiaries’ balance sheets. The naira’s collapse in 2023 and 2024 swelled foreign-currency debts and pushed Nestlé Nigeria, Nigerian Breweries, Guinness Nigeria and MTN Nigeria into negative equity.

• Heineken took up its rights in Nigerian Breweries’ N599.1 billion rights issue in 2024, lifting its stake from about 56% to 72.9%. The brewer has since repaid all its borrowings, down from N269.3 billion in September 2024, and held N77.3 billion of cash at the end of September.
• AB InBev converted a $379.9 million shareholder loan into International Breweries shares in the same year. Mondelez International turned a $7.7 million loan into Cadbury Nigeria shares, raising its stake to 79.39%.

International Breweries now has no bank debt. In September, it used its share premium to erase accumulated losses, then returned N84 billion of capital to shareholders. About N82 billion of that went to AB InBev group companies, which own 97.42% of the brewer. Free float is 2.55%.

• MTN Nigeria cut borrowings to N333.3 billion from N527.7 billion in December and reported net cash of N47.7 billion after paying N860.8 billion in dividends. Its equity is now N843.9 billion, against negative N573.6 billion two years ago. Cadbury Nigeria’s borrowings fell 35% to N14.9 billion.

Nestlé Nigeria remains the most indebted. Its borrowings fell to N426.3 billion from N476 billion in December and about N685 billion in September 2024, but the lender is mostly its own parent, which collects the interest. Guinness Nigeria, bought by Singapore’s Tolaram Group from Diageo in 2024, carried N41 billion of loans and overdrafts with just N1.4 billion of cash.

Where fees fell

Three companies paid less. Guinness Nigeria’s royalty and technical fees fell 15% to N9.8 billion. Under Tolaram, it still pays Diageo to use the Guinness brand under licence and royalty agreements struck at the sale. Its revenue rose 20.4%.

• Beta Glass, sold by Greece’s Frigoglass to Helios Investment Partners in February, stopped paying management service charges, which had cost it N1.3 billion in the same nine months of 2025. It still pays a technical know-how fee of 3% of net sales, N3.9 billion in the period. Cadbury Nigeria’s fees to Mondelez fell 8% to N2.2 billion.
• The owners are not reducing their exposure. Tolaram lifted its Guinness stake to about 71% through a mandatory offer in 2025 and was still buying shares in August. Helios’s holding companies raised their Beta Glass stake to 72% from 70%. MTN Group, which owns about 75.6% of MTN Nigeria, has put a planned sale of shares to local investors on hold.

MTN Nigeria’s earnings release does not break out fees paid to MTN Group, so it is excluded from the fee totals.