At 37.44% YtD Gain, NGX Consumer Goods Index Outpaces ASI, Other Indicators – THISDAYLIVE

Kayode Tokede  

With a gain of 37.44 per cent Year-till-Date (YtD), the Nigerian Exchange Limited (NGX) Consumer Goods Index outshined other indices to emerged as the best performing index in the first five months ended may 2025.

The growth was driven by investors demand for Nestle Nigeria Plc, Nigerian Breweries Plc, among other quoted companies on the bourse.

During the period under consideration, the Consumer Goods Index outperformed major indicators such as; NGX All-Share Index (ASI) that closed YtD at 8.56 per cent. Conversely, the NGX Oil & Gas index, followed by NGX Insurance Index emerged the worst performing indices on the Exchange during the period.

Also, NGX Oil & gas closed flat at -14.19 per cent driven by profit-taking in Oando Plc, while the NGX Insurance Index closed at -4.63 per cent in its YtD performance.

Nestle Nigeria, the most capitalised stock in the NGX Consumer Goods Index has appreciated by N567.14 billion in first five months of 2025 to close May 2025 at N1,590.50 per share after gaining N715.50 or 81.77 per cent from N875 per share it closed 2024, following an impressive first quarter ended (Q1) 2025 unaudited result and accounts.

Investors reacted to the leading Fast-Moving Consumer Good (FMCG) Q1 2025 results that showed N51.15billion profit before tax from a loss before tax of N196.09 billion in Q1 2024.

Capital market analysts have attributed the soar demand for companies in the Consumer Goods Index to recovery in Q1 2025 corporate earnings, stressing that these companies overcame the numerous macroeconomy challenges of 2023 & 2024 FY to generate profit with a possibility of declaring dividend  in 2025.

The foreign exchange policy by the Central Bank of Nigeria (CBN) of 2023 led to a sharp depreciation of the Naira, adversely affecting companies in the Consumer Goods index.

The review of companies in the NGX Consumer Goods Index revealed that Golden Guinea Breweries was the only company that declined in stock price, while Honeywell Flour Plc and Northern Nigeria. Flour Mills Plc advanced in stock price.

From the YtD review, the investors average return in Golden Guinea Breweries dropped by 17.8per cent to close May 2025 at N7.10per share while investors average return in Honeywell Flour grew significantly by 233.3 per cent to close at N21.00 per share from N6.30 per share on the NGX.

Also, the average return in Northern Nigeria Flour Mills Plc stood at 216.4per cent to close May 2025 at N138.90 per share from N43.90 per share the stock opened for trading.

THISDAY checks revealed that the listed breweries companies witnessed growth in stock price in the period under review as investors expanded their portfolios.

For instance, the stock price of Nigerian Breweries Plc advanced by 78.13 per cent YtD to close N57.00 per share from N32.00 per share, while the stock price of International Breweries Plc gained 74.8 per cent to close May 2025 at N9.70 per share from N5.550 per share.

In addition, the stock price of Champion Breweries increased by 78.5 per cent YtD to close at N6.80 per share from N3.81 per share and Guinness Nigeria gained 22.4 per cent YtD to close May 2025 at N86.00 per share from N70.25 per share on NGX.

Analysts at Cordros Securities in a report had urged investors to BUY most stocks in the Consumer Goods Index.  

The firm in its report maintained an optimistic outlook for the food companies such as Nestle Nigeria, NASCON, given the essential nature of their products,“and their ability to implement price hikes more effectively than their peers, supported by a favourable price/volume mix.”

“These companies also benefit from strong market share, extensive distribution networks, and consumer demand resilience, making them less affected by shifts in consumer purchasing power, providing a solid advantage in the medium term,” the report explained.

Afrinvest in a report titled, “2025 Brewery Sector Update Report | Brewing Back to Orofitability,” said it anticipated  that global brewery performance would be influenced by several key trends: the deepening of premiumisation strategies for flagship brands, and Innovation tailored to Gen-Z preferences.

The firm also listed, “supply chain decarbonisation, and strategic mergers, acquisitions, and market exit driven by profitability outlooks. These trends are explored in detail in the global industry analysis section,” among several key trends to drive the sector in 2025.   

The industry experienced a strong close to the year, with revenue in Q4:2024 rising 42.6per cent quarter-on-quarter (q/q) to N611.0billion – the highest quarterly revenue in 2024 and the sharpest quarterly growth. A key enabler was the resurgence of year-end social events, particularly in Lagos, where the “Detty-December” festivities contributed an estimated N111.5billion (approximately, $71.6million) to tourism and entertainment spend, with brewery products benefitting as derived demand.

Going forward the firm said, “Looking forward, we project a return to profitability in 2025 for the domestic industry, with a base-case Profit Before Tax (PBT) estimate of N215.3billion. This outlook is underpinned by a mix of favourable external conditions (e.g., macroeconomic stabilization and corporate income tax adjustments) and internal initiatives such as capital injections, merger and acquisition synergies, and product resizing strategies.”

THISDAY can report that two listed breweries company, Nigerian Breweries reported N69.99 billion profit before tax in Q1 2025 from a loss before tax of N65.58 billion as International Breweries announced N35.07 billion profit before tax in Q1 2025 from a loss before tax of N89.35 billion.

The Managing Director/CEO, Nigerian Breweries, Mr. Hans Essaadi in a statement noted that the significant improvement in profitability reflects both volume and value growth, as well as the benefits from the business recovery and process optimisation initiatives undertaken in 2024.

 Essaadi explained that the strategic initiatives of 2024 including portfolio optimisation, rightsizing of operations, and disciplined working capital management, continue to yield strong results.

He affirmed that the company was firmly on track in executing its turnaround plan of restoring long-term profitability and building a solid foundation for sustainable growth.

Analysts at Cordros Capital Limited stated that the earnings performance of Nigerian Breweries underscored combined impact of strong revenue generation, alongside the gains from recovery and process optimisation efforts implemented in 2024.

They added, “The brewer’s performance was supported by reduced FX liabilities through the proceeds from the 2024 Rights Issue and a stable exchange rate during the period”.

Speaking with THISDAY, the Vice President Highcap Securities Limited, Mr. David Adnori explained that the growth in NGX Consumer Goods Index is on the backdrop of massive interest in Nigerian Breweries, Nestle Nigeria, Cadbury Nigeria, among other companies quoted in the index. 

He added that price sensitive information in June 2025 may continue to play a critical role in the companies’ downward or upward movement on the Exchange.

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