Champion Breweries Plc has announced its unaudited H1 2026 results, revealing a significant 34.13% year-on-year decline in profit before tax, which stood at N2.28 billion compared to N3.46 billion in the corresponding period of 2025.
This drop in profitability occurred despite robust revenue growth. The company recorded a profit before tax of N1.44 billion in the second quarter, a recovery from a N1.07 billion loss before tax in Q1 2026, but lower than the N1.72 billion profit before tax in Q2 2025.
Performance Drivers and Cost Pressures
The brewer experienced strong top-line growth, with revenue climbing 124.25% year-on-year to N35.73 billion in H1 2026 from N15.93 billion in H1 2025. This led to a 59.43% increase in gross profit, reaching N13.15 billion from N8.25 billion.
However, the benefits of higher sales were significantly eroded by escalating cost pressures. Cost of sales surged by 193.83% year-on-year to N22.58 billion from N7.68 billion, outpacing revenue growth and impacting gross margin.
Selling and distribution expenses also rose by 77.51% to N4.80 billion from N2.70 billion, while administrative expenses increased by 25.56% to N2.15 billion from N1.71 billion. Despite these operational cost increases, operating profit still improved by 59.94% to N6.17 billion from N3.86 billion in H1 2025.
The primary factor behind the decline in pre-tax profit was a sharp increase in finance costs. Net finance costs soared by 382.69% to N3.90 billion from N807.45 million in the prior-year period, with finance costs alone reaching N4.91 billion from N543.699 million.
Profit after tax, however, saw an increase of 15.64% to N2.65 billion from N2.29 billion, aided by a lower income tax expense of N368.88 million compared to N1.17 billion in H1 2025.
Balance Sheet Expansion and Financing
Champion Breweries' balance sheet showed substantial expansion during the first half of 2026. Total assets grew by 150.83% to N130.80 billion as of June 30, 2026, from N52.15 billion at the end of FY 2025.
This growth was largely driven by a significant investment in property, plant, and equipment, which increased to N101.70 billion from N19.75 billion. Conversely, cash and cash equivalents declined by 26.79% to N5.47 billion from N7.47 billion.
The company's equity position strengthened considerably, rising by 428.27% to N69.082 billion from N13.077 billion. This was supported by an increase in share capital, the addition of a share premium of N35.78 billion, retained earnings growth, and the recognition of N16.88 billion in non-controlling interest.
On the financing front, total borrowings decreased to N37.14 billion as of June 30, 2026, from N56.36 billion at the end of 2025. While non-current borrowings increased to N37.14 billion from N26.96 billion, Champion Breweries reported no short-term borrowings in H1 2026, a notable change from N29.39 billion at December 2025.
As of the close of trading on July 23, 2026, Champion Breweries Plc shares were priced at N11.25, reflecting a 19.64% year-to-date loss.
