The combined finance costs of 12 leading fast-moving consumer goods companies listed on the Nigerian Exchange declined by 23.02 per cent to N67.66bn in the first quarter of 2026, from N87.90bn in the corresponding period of 2025, signalling stronger profitability, lower debt burdens and increased reliance on equity financing.
An analysis of the companies’ unaudited financial statements showed that finance costs decreased by N20.23bn year-on-year as many firms returned to profitability and accelerated debt repayment after weathering the impact of foreign exchange volatility and elevated borrowing costs in 2025.
Finance cost is the total cost a company incurs for borrowing money or financing its operations. It is reported in the income statement and reduces a company’s profit.
The PUNCH spoke to industry analysts who attributed the improvement to stronger earnings, deleveraging, and increased access to equity financing following the rally in the Nigerian capital market, which reduced dependence on expensive bank borrowings.
The biggest contributor to the decline came from Dangote Sugar Refinery, although it still recorded the highest finance cost in the sector at N28.45bn, down 4.73 per cent from N29.86bn. Nestlé Nigeria followed, with finance costs falling 27.88 per cent to N16.92bn from N23.47bn, while Nigerian Breweries posted one of the sharpest reductions, cutting finance costs by 46.09 per cent to N8.28bn from N15.36bn.
Other notable declines included Guinness Nigeria, whose finance costs plunged 81.42 per cent to N1.43bn from N7.72bn; BUA Foods, down 72.30 per cent to N1.04bn from N3.77bn; Cadbury Nigeria, which reduced finance costs by 67.81 per cent to N392.7m from N1.22bn; and NASCON Allied Industries, where finance costs declined 59.27 per cent to N86.5m from N212.4m.
However, a few companies recorded higher finance costs. Champion Breweries saw finance costs surge 936.37 per cent to N3.05bn from N293.93m; International Breweries posted an 82.80 per cent increase to N3.58bn from N1.96bn; and Northern Nigeria Flour Mills recorded a 2,110.18 per cent jump to N306.16m from N13.85m. In comparison, PZ Cussons Nigeria reported an 84.61 per cent increase to N217.1m from N117.6m. Honeywell Flour Mills’ finance cost remained unchanged at N3.90bn.
Among the companies, Guinness Nigeria recorded the strongest recovery, slashing finance costs by 81.42 per cent, or N6.28bn. BUA Foods followed with a 72.30 per cent reduction amounting to N2.72bn, while Cadbury Nigeria reduced finance costs by 67.81 per cent, or N827.3m.
NASCON Allied Industries posted a 59.27 per cent decline equivalent to N125.9m, while Nigerian Breweries cut finance costs by 46.09 per cent, or N7.08bn.
Cadbury also reported a large unrealised foreign exchange gain that pushed its reported finance line into a net income position, although its underlying finance cost still declined sharply. Nigerian Breweries similarly benefited from a near-elimination of foreign exchange losses, while Nestlé’s finance income surged significantly, reducing its net finance burden.
Despite the broad improvement, Dangote Sugar recorded only a 4.73 per cent reduction in finance costs, equivalent to N1.41bn, leaving it with the sector’s largest financing burden.
Honeywell Flour Mills recorded no improvement as finance costs remained flat at N3.90bn.
Among firms whose costs worsened, PZ Cussons Nigeria reported an 84.61 per cent increase, or N99.5m; International Breweries posted an 82.80 per cent rise amounting to N1.62bn, while Champion Breweries and Northern Nigeria Flour Mills recorded the steepest increases.
Dangote Sugar remained the largest spender on finance costs at N28.45bn, followed by Nestlé Nigeria at N16.92bn, Nigerian Breweries at N8.28bn, Honeywell Flour Mills at N3.90bn and International Breweries at N3.58bn.
Champion Breweries spent N3.05bn, Guinness Nigeria N1.43bn, BUA Foods N1.04bn, Cadbury Nigeria N392.7m, Northern Nigeria Flour Mills N306.16m, PZ Cussons Nigeria N217.1m, and NASCON Allied Industries N86.5m.
Meanwhile, based on finance cost moderation and net finance performance, NASCON Allied Industries ranked the strongest after recording finance costs of just N86.5m alongside net finance income of N2.44bn.
Honeywell Flour Mills maintained a positive net finance income position while keeping annual finance costs unchanged.
Nestlé Nigeria dramatically reduced its net finance cost after finance income surged to N15.26bn, while Nigerian Breweries benefited from the sharp decline in foreign exchange losses.
Although Cadbury Nigeria reported net finance income due to unrealised foreign exchange gains, its underlying finance cost also improved substantially.
In a phone interview with The PUNCH, the Chief Executive Officer of Economic Associates, Dr Ayo Teriba, said the decline reflected a shift in corporate financing from debt to equity as the Nigerian stock market strengthened.
He said, “This means that Nigerian companies are likely to have relied more on equity if you compare the first quarter of 2026 with the first quarter of 2025. They would have relied more on debt in 2025, but the growth that we’ve seen in the stock market has become more favourable to those who want to raise money in the equity market. If they are getting more financing from equity and less from debt, financing costs will decline.”
Teriba added that stronger equity markets benefited both companies and investors. He said, “The companies themselves are enjoying cheaper financing. If your performance is good enough for you to attract significant funding through the equity market, it lowers your financing costs. Those holding the equity are happier because they are compensated through capital gains.”
An Investment Associate at CardinalStone, Kayode Eseyin, attributed the moderation in finance costs to improved earnings and aggressive debt repayment. He said, “Most FMCGs returned to full profitability in 2025 and are basically on a deleveraging spree. They are paying down their loans significantly from their improved earnings and cash positions. When you pay down debts, finance costs naturally moderate.”
Eseyin added that capital raised by some companies also contributed to the lower financial burden. He said, “Some of them also raised capital last year, which is part of the reason why we saw moderation in finance costs. The outlook is positive as we expect improved macroeconomic conditions, stronger earnings, and moderating finance costs to support sustainable earnings growth.”
Similarly, a research analyst, Mobifoluwa Adesina, assessed that the easing in finance costs was driven by two factors: sector-wide deleveraging and a more stable interest rate environment.
He said, “Following the steep rise in borrowing costs during the 2022–2024 tightening cycle, many FMCG companies aggressively repaired their balance sheets through debt reduction, refinancing and equity raises, resulting in materially lower debt burdens by 2025.”
He added that the pause in monetary tightening and modest moderation in rates reduced funding pressure. “Consequently, consumer goods companies entered 2026 with less interest-bearing debt and lower financing obligations, leading to the 23 per cent decline in finance costs you are seeing across the sector,” the analyst concluded.