Guinness Nigeria Plc, subsidiary of Diageo Plc has announced its unaudited results for its first half (H1) year period ended December 31, 2022.
The results which were released to the Nigerian Exchange Group (NGX), showed that revenue increased 9percent versus the prior comparable period despite the challenging business environment. The results statement noted that Gross profit grew 16percent, as revenues grew by 9percent ahead of the 5percent increase in cost of sales, driven by inflation and the impact of Naira devaluation on imported materials in the half- year under review.
Speaking on the announcement, John Musunga, Managing Director/CEO, Guinness Nigeria plc said; “In the half year ended 31st December 2022, Guinness Nigeria delivered results that reflected the continued regulatory, competitive and inflationary challenges in the operating environment in Nigeria. The period was characterised by challenges such as escalating inflation, dwindling consumer disposable income and a worsening foreign exchange situation. Despite these challenges, the business recorded good progress against our strategic focus brands.
“Despite lapping a strong quarter in 2021, revenue grew by 9percent, benefiting from price and mix optimization, as well as reflecting resilient consumer demand and improved outlet coverage as we continue to optimize our route to consumer. Revenue grew across most categories, driven by our strategic focus brands, Guinness, Ready-to-Serve and Spirits. Malta Guinness was flat on previous year due to the impact of increased pricing in response to the higher inflationary pressure on packaging costs”, he said.
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“Marketing expenses increased 7percent, as we increased marketing investment to support our strategic growth priorities and target market share improvement. Distribution expenses increased 28percent, driven by increase in the price of diesel, other haulage inputs and asset replacement cost. Despite all the above, the company delivered N12.6 billion operating profit.”
Musunga noted that the continued devaluation of the Naira resulted in a 758percent increase in net financing costs, due to the revaluation of the hard currency debt. However, finance income increased by 121percent on account of higher yields from short-term cash investments. Lower corporate tax is driven by the reduction in pre-tax profits.
“Looking forward, we will continue to drive our strategy which has deliberate focus on key categories, exploding Guinness growth, 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 2023 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.
On her part, Omobola Johnson, chairman, Board of Guinness Nigeria Plc, said, “the Board is confident that our strategy is sound, and will in the long term continue to drive value to all stakeholders”. She 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.