As Nigerian Breweries Plc tries to navigate through the economic challenges in the country, analysts are of the view that integrations of Disteil’s operations will open up new growth opportunities for the company.

Given the company’s recent profit challenges, this integration could enhance revenue and cost synergies, while gaining exposure to the rapidly expanding spirits market in the medium term.

Despite the foreign exchange losses which had affected topline gains, they anticipate gradual recovery in 2024 financial year, driven by price increases and moderate volume growth.

On volumes, they cite the company’s expansion efforts in the Western and Northern regions, alongside an intensified presence in the Eastern part of the country. This, coupled with a focus on premium brands, is expected to yield a 13.3% revenue growth for 2024 and a CAGR of 9.3% over 2025-2028.

However, they anticipate a slight 20bps decline in gross margin to 35.1% in 2024, when compared to 35.5% in 2023 financial year., due to increased cost pressures from the high inflationary environment and currency devaluation.

However, the prevailing foreign exchange challenges in the country are expected to continue exerting pressure on the company bottom line.

Specifically, they expect a 33.5%  increase in foreign exchange loss to N204.77 billion, due to the company’s foreign currency exposure and substantial debt burden.

While acknowledging Nigerian Breweries strong market position, looking at the company liquidity position amidst high leverage, they noted that this strength is somewhat offset by increasing pressure from the higher working capital absorption and debt levels.

Stressing that in their assessment, the brewer’s liquidity position is considered weak due to its substantial short-term obligations.