Prime Business AfricaChampion Brew announced solid financial returns in the first quarter (Q1) of 2025, however, the company has a finance cost problem that is affecting the brewer’s bottom line.
According to its condensed Interim financial statements for the three-month period ended March 31, 2025, Champion Brew’s revenue grew by 93.74 per cent year-on-year, from N4.37 billion to N8.48 billion.
Join our WhatsApp ChannelCost of production followed the double-digit growth path with a 55.06 per cent increase, after rising to N4.49 billion in the first quarter of this year, up from N2.89 billion spent on production during the same period in 2024.
This handed the company a gross profit of N3.99 billion in Q1 2025, compared to the N1.48 billion recorded in the first quarter last year – indicating a 169.39 per cent growth.
In addition, Champion Brew reported other income of N13.69 million during the reviewed period, reflecting a 19.79 per cent decline when compared to the N17.06 million filed in Q1 2024.
However, the company’s earnings were reduced by N1.25 billion in selling and distribution expenses – which increased by 24.06 per cent year-on-year from N1.01 billion – and a 44.94 per cent increase in administrative expenses, which gulped N776.83 million in Q1 2025 compared to N535.94 million in Q1 2024.
This resulted in the company recording an operating profit of N1.97 billion in the first quarter of this year, compared to the N47.61 million loss recorded in the same period in 2024.
Champion Brew’s earnings were further supported by a N59.48 million finance income during the period under review (having recorded zero in the first quarter last year) and a zero net loss on foreign exchange (FX) transactions, which left N743.27 million FX loss in the company’s finances in Q1 2024.
However, it was significantly impacted by a 3,810.24 per cent year-on-year increase in finance costs, which grew from N7.51 million to N293.93 million, resulting in a net finance cost of N234.45 million in Q1 2025, against the N750.79 million recorded in Q1 2024.
With net finance cost down by 68.77 per cent year-on-year, Champion Brew was able to post N1.73 billion profit before tax (PBT) in the first quarter of 2025, overcoming the N798.41 million loss before tax recorded in the corresponding period in 2024.
As Champion Brew posted its first profit in Q1 since 2022, the brewer was hit wth a N755.41 million income tax, which increased by a staggering 2,870.92 per cent year-on-year from N25.42 million.
Despite the significant increase in its tax charge, Champion Brew pulled out a N984.57 million profit after tax (PAT) in the first quarter of 2025, exiting the N823.83 million loss after tax on its bottom line in Q1 last year.
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