- Guinness Nigeria Reports N1.9bn Drop in Profit
Guinness Nigreria Plc, one of the leading beverage and alcohol companies in the country, announced a N1.9 billion decrease in profit before tax in the first half of the year ended 31sth December 2019.
In the report released through the Nigerian Stock Exchange (NSE), revenue increased slightly by 1 percent during the period while operating profit declined by N1.1 billion largely due to increase in excise duty.
The cost of sales increased by 2 percent as cost of marketing a unit product surged during the period under review. Accordingly, the net finance cost stood at N1.6 billion due the surge in cost of financing short term loans that weighed on total cost of servicing financial obligations and also impacted profit before tax.
Comment on the report, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria plc said, “In the half year ended 31st December 2019, Guinness Nigeria delivered results that reflected a very strong second fiscal quarter performance despite continued regulatory, competitive and inflationary challenges in the operating environment. Strong growth in Guinness, spirits and RTDs together with cost benefit from various productivity initiatives has helped to mitigate other risks. I am pleased that revenue growth is in line with our strategy driven by better commercial execution and innovations. Within the period, we continued activating several innovations such as Guinness Smooth, Guinness Gold, Baileys Delight, Orijin Gin, Singleton and Johnnie Walker Green label. These have contributed significantly to the growth. Despite the increase in excise duties on beer and mainstream spirits, the competitive environment was such that there was lack of pricing opportunities in the period to mitigate this.”
“Looking forward, we will continue to drive our strategy which has deliberate focus on key categories, growing spirits faster, continuing to innovate to meet consumer needs, and driving productivity. Whilst we are conscious of the continued challenging operating environment with double digit inflation and pressured consumer spending, we are positive about the execution of our strategy for the remainder of the 2020 financial year. We remain confident of the resilience of our Total Beverage Alcohol portfolio strategy as a key driver of sustainable growth in the market”, he added.
Mr. Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc, stated that, “The Board is confident that our strategy is sound, and we are making the right investments in the company and brands to ensure long term competitiveness”. He further stated that “the Board continues to support the Management in its efforts to build a business that aims to consistently deliver growth for stakeholders.”