• Wednesday, July 17, 2024
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Guinness Nigeria reports N18.2bn full year loss despite revenue growth

Guinness stops importation of premium spirits to reduce FX exposure

Guinness Nigeria Plc reported a full-year loss of N18.168 billion in the audited results for the period ended June 30, 2023, as against N15.651 billion profit in the preceding year 2022. This represents a decline of 216 percent.

The brewer’s result submitted at the Nigerian Exchange Limited (NGX) shows it reported a loss despite 11 percent increase in revenue to N229.440 billion from N206.822 billion in 2022.

Net finance costs spiked to N45.496 billion from N225.899 million in 2022. Loss before income tax was N22.138 billion as against profit before tax of N23.674 billion in 2022.
As at June 30, 2023, the issued and fully paid-up share capital of the Company stood at 2,190,382,819 ordinary shares of 50 kobo each (2022: 2,190,382,819 ordinary shares of 50 kobo each). The Register of Members showed shareholders that held 5 percent and above of the issued share capital.

They are Guinness Overseas Limited (a subsidiary of Diageo plc) with 1,099,230,804 ordinary shares (2022: 1,099,230,804 ordinary shares) constituting 50.18percent shareholding (2022: 50.18percent shareholding); Atalantaf Limited (a subsidiary of Diageo plc) with 171,712,564 ordinary shares (2022: 171,712,564 ordinary shares) constituting 7.84percent shareholding (2022: 7.84percent shareholding); Stanbic IBTC Nominees Limited with 140,075,979 ordinary shares (2022: 136,610,979 ordinary shares) constituting 6.40percent shareholding (2022: 6.24percent shareholding); Mutima Opportunity Fund LP with 122,857,111 ordinary shares (2022: 112,502,111 ordinary shares) constituting 5.61percent shareholding (2022: 5.14percent shareholding).

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In a statement, John Musunga, Managing Director/CEO, Guinness Nigeria Plc said that the earnings and revenue growth resulted from strategic pricing and successfully deploying product mix across categories to counter cost inflation, and an optimised route-to-consumer approach that improved outlet coverage and the use of its B2B platform to improve distribution efficiency.

The company said that revenue growth was particularly strong for the strategic focus categories, Stout, Ready-to-Serve, and Mainstream Spirits.

“Although gross profit increased by 8 percent compared to the previous year, the cost of sales increase outpaced revenue growth primarily due to the prevailing macro-economic headwinds, specifically inflation, currency depreciation and the illiquidity of the forex market.”

The foremost brewer also reported that the company’s financial performance during the period was engendered by a number of macroeconomic headwinds.

“The intense volatility in the value of the Naira and the unavailability of forex in the official foreign exchange window adversely impacted the company’s financial performance. Specifically, the Central Bank of Nigeria floated all the exchange rate windows towards the end of Q4, causing a huge devaluation of Naira from N419 to N760 to US$1, and this resulted in a massive N49.1B unrealised forex loss in the income statement,” Musunga said.

Omobola Johnson, Board Chair of Guinness Nigeria Plc assured “Despite macro-economic challenges, the Board maintains confidence in the company’s well-considered strategy, anticipating continued strong value creation for all stakeholders in the medium to long term.”

“It is a credit to management’s impressive performance, that, despite the macro-economic headwinds, the business delivered N23.4 billion underlying operating profit for the year ended June 30, 2023,” she added.