International Breweries Plc reported a pre-tax profit of N40.31 billion in its Q1 2026 results, representing a 15 per cent increase from N35.07 billion recorded in the corresponding period of 2025, driven largely by improved cost efficiency and stronger gross margins.

This is according to its Q1 2026 financial results filed with the Nigerian Exchange on Friday, April 24, 2026.

The brewer recorded modest revenue growth of 2.9 per cent to N178.71 billion from N173.63 billion in Q1 2025, but a significant reduction in cost of sales helped lift overall profitability during the period.

Key highlights (Q1 2026 vs Q1 2025)

Revenue: N178.71 billion, up 2.9 per cent YoY

Cost of sales: N103.61 billion, down 9.1 per cent YoY

Gross profit: N75.09 billion, up 25.9 per cent YoY

Operating expenses: N35.44 billion, up 28.9 per cent YoY

Pre-tax profit: N40.31 billion, up 15.0 per cent YoY

Post-tax profit: N19.62 billion, down 33.2 per cent YoY

Finance cost: N3.58bn , up 82.8 per cent or N1.96bn YoY

Total assets: N784.86bn, up 6.1 per cent to N739.74bn YoY

Total liabilities: N265.42bn, up 10.6 per cent to N239.92bn YoY

Total equity: N519.44bn, up 3.9 per cent to N499.83bn YoY

EPS: 12kobo, down -29.4 per cent from 17kobo YoY

A closer look at the company’s performance shows that the primary driver of profit growth was improved production efficiency.

Cost of sales declined significantly to 58.0 per cent of revenue from 65.7 per cent a year earlier, reflecting lower material costs and better cost management.

This pushed gross profit higher by 25.9 per cent to N75.09 billion, despite only marginal revenue growth.

Materials consumed and allocated overheads dropped by 16 per cent, helping offset increases in employee costs, technical fees, and marketing expenses.

However, operating expenses rose sharply by 28.9 per cent to N35.44 billion, reflecting higher spending on distribution, advertising, and administrative activities.

Finance income declined by 23.2 per cent to N4.22 billion, while finance costs increased by 82.8 per cent to N3.58 billion, partially moderating the gains from core operations.

Despite the strong pre-tax performance, post-tax profit fell by 33.2 per cent to N19.62 billion, largely due to a sharp increase in tax expense to N20.69 billion, up from N5.69 billion in Q1 2025.

This pushed the effective tax rate to over 50 per cent, significantly eroding earnings and weakening profit conversion.

Total assets grew by 6.1 per cent to N784.86 billion, up from N739.74 billion at year-end 2025, supported by higher current assets, particularly trade receivables, which surged by 77.7 per cent to N108.64 billion.

Total liabilities increased by 10.6 per cent to N265.42 billion, a faster pace than asset growth, attributed mainly to current liabilities, including trade payables and lease obligations.

Total equity rose by 3.9 per cent to N519.44 billion, supported primarily by improved retained earnings.

Retained losses narrowed significantly by N19.62 billion to N171.42 billion, reflecting the company’s return to profitability.

The balance sheet reflects a company in recovery mode, with improving profitability and asset growth.

The stock closed at N14.00 per share on the Nigerian Exchange Limited on Friday, April 24, 2026, reflecting a slight decline from the previous day.

The stock recorded its year high of N15.23 as of March 3, but has since moderated to its January 2, 2026, opening price of N14.00.

While investors may take comfort in stronger operating performance and improved margins, the sharp rise in tax expense and growing cost pressures remain key concerns for near-term earnings sustainability.