International Breweries reported a 25% YoY revenue growth to N53.88bn in Q2 2022, driven by higher prices. Due to the price increase, gross margin expanded by c.1,000 basis points (bps) to 31% in Q2 2022 (Q2 2021: 21%). In absolute terms, gross profit grew by 86% YoY to N16.65bn in Q2 2022.

However, owing to competitive pressures as well as inflationary pressures, operating expenses increased by 47% YoY to N16.62bn. The opex increase stemmed from higher marketing expense, which grew by 74% YoY to N8.20bn. The operating expense margin to 500 basis points to 31% (Q2 2021: 26%).

Therefore, the increase in operating expenses offset the gross profit growth. But the Company managed to record a N36mn operating profit in Q2 2022 from a N2.33bn operating loss. The company ended the quarter with a N385mn loss in Q2 2022, an improved position from a N11.31bn loss in Q2 2021.


International Breweries ability to remain profitable will rely on their capacity to preserve gross margin whilst maintaining a lid on their operating expenses. However, given the current cost realities, this may prove challenging.

Furthermore, as with the other brewery players, the fight for a share of consumer’s wallet will remain a key factor of their revenue growth, as income levels shrink on the back of spiraling inflation rate. That said, our focus on the Company’s growth drivers remains in its Lager market leadership in the Eastern and Western regions. For the second half-year, demand is expected to be stronger due to festive activities especially in Q4 2022.

Please follow the link “International Breweries Plc H1 2022 – Higher Finance Cost Underwhelms Q2 Performance”  to view the whole report.

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