Guinness Nigeria Plc, a subsidiary of Diageo Plc, has reported its highest half-year profit in eight years of N8.8 billion in the period ended December 31, 2021 , a recovery from a loss of N371 million in the corresponding period of 2020.
The major driver of Guinness’s performance is its revenue from Nigeria and the sale of by-products as the beverage company reported a 50.8 percent increase in revenue of N109 billion compared to N72.4 billion in the same period of 2020.
The revenue was on the back of 90 percent sales in Nigeria while only 1 percent was from exports. Sales in Nigeria reported N108 billion while export sales yielded N1 billion.
According to a statement from the firm, Guinness Nigeria Plc Managing Director/ CEO, Baker Magunda, affirmed that the earnings resulted from headline price increases in key brands; a reflection of the resilient consumer demand and improved outlet coverage.
“Revenue growth across all key categories is driven by the company’s strategic focus brands; Malta Guinness and Guinness, as well as double-digit growth in local and imported spirits and the ready-to-drink category,” Magunda said.
Further analysis by BusinessDay shows the company made a profit margin of 8 percent, showing how the company is managing its cost relative to its revenue.
Read also: Guinness Nigeria clears losses with record profit
Also, a 97 percent jump in Guinness’s other income gave a boost to the company’s income and consequently, the performance in the period, Its other premium income increased to N1.4 billion as of December 2021 from N697 million in the same period of 2020.
The other income consists of N791.4 million from the gain on disposal of property, plant, and equipment, N424.5 million from the sale of by-products, and N158 million from income from leased assets.
The company recorded an increase in its administrative expenses as well as selling and distribution expenses. Administrative expenses increased to N5.5 billion as of December 2021 from N4.9 billion in December 2020 while selling and distribution expenses increased to N18.8 billion in 2021 from N10.7 billion in the comparable period of 2020.
In the period under review, Guinness was also able to increase its finance income and reduce its finance cost. For instance, finance income increased to N633 million from N335 million while finance cost reduced to N1.3 billion from N2.8 billion.
There was an increase in the Beverage company’s earning per share ratio to N403 from a loss of 14kobo.
Guinness’s total assets grew to N199.7 billion as of December 2021 from N148.5 billion, in December 2020 while their liabilities increased to N116 billion in December 2021 from N75.8 billion in December 2020.
Guinness has a market cap of N102.4 billion with a stock price that appreciated by 19.87 percent to N46.75 as of Friday, 28 January 2021 from N39 year to date.
