Guinness Nigeria to pay N7 dividend as half-year profit rises to N25.3bn

Guinness Nigeria Plc will pay an interim dividend of N7 per share after reporting a 53.3 percent increase in profit after tax to N25.30 billion for the six months ended June 30, 2026.

According to the corporate action disclosure, shareholders of the company will receive an interim dividend of N7.00 per ordinary share, subject to appropriate withholding tax, and approval will be paid to shareholders whose names appear in the Register of Members as at the close of business on Wednesday, July 29, 2026.

Revenue increased by 11.8 percent to N265.04 billion from N237 billion in the corresponding period of 2025. Domestic sales accounted for N260.94 billion, while export revenue rose to N4.10 billion, indicating that the Nigerian market remains the company’s primary source of income. The company noted that more than 98 percent of its revenue is generated within Nigeria.

Growth at the top line was accompanied by higher production costs. Cost of sales rose by 13.5 percent to N167.57 billion, slightly outpacing revenue growth, reflecting the continued impact of raw material, packaging, and production costs.

Despite this, gross profit increased to N97.47 billion from N89.38 billion, suggesting that pricing actions and sales growth continued to offset cost pressures. Gross margin declined to about 36.8 percent from 37.7 percent, showing that input cost pressures have not completely eased.

Operating profit, however, reflected a different trend. Administrative expenses increased by about 4.8 percent to N16.23 billion, while marketing and distribution expenses rose 6.3 percent to N40.19 billion, driven largely by distribution costs, which increased to N24.04 billion from N19.78 billion.

Marketing expenditure declined slightly, indicating that cost growth was concentrated more in logistics than in brand support. Even with these higher operating expenses, operating profit rose to N24.34 billion from N36.16 billion. The financial statements present an operating profit of N24.34 billion for the six-month period compared with N36.16 billion in the prior-year comparative, although the movement is affected by changes in the presentation of quarterly and year-to-date figures in the statement.

Profit before tax, which incorporates finance costs, increased to N38.34 billion from N23.83 billion, highlighting that the largest earnings improvement came below the operating line.

Finance expenses fell to N4.36 billion from N12.44 billion, representing a reduction of nearly 65 percent. Interest expense on loans declined to N4.23 billion from N10.41 billion, while losses associated with foreign currency balances were largely absent during the period compared with the previous year. This suggests that the relative stability in Nigeria’s foreign exchange market compared with 2025 eased one of the biggest pressures on the brewer’s earnings.

The balance sheet also reflects a reduction in leverage. Current borrowings declined to N16.06 billion from N36.84 billion at the end of December 2025, while long-term borrowings fell slightly to N6.71 billion from N7.08 billion. During the six months, the company obtained N69.76 billion in new loans but repaid N89.35 billion, resulting in a net reduction in debt. Lower debt levels translated into lower interest costs and contributed to the increase in earnings.

The improvement in profitability has also strengthened shareholders’ funds. Retained earnings moved to a positive balance of N15.70 billion from a deficit of N5.22 billion at the end of December 2025, lifting total equity to N64.25 billion from N43.32 billion. The increase came despite the declaration of N4.38 billion in dividends during the period, indicating that profits more than offset shareholder distributions.

Cash generation remained positive even as liquidity declined. Net cash generated from operating activities increased to N42.93 billion from N40.93 billion, but cash and cash equivalents fell to N3.53 billion from N6.97 billion at year-end. The reduction reflects the company’s capital expenditure of N16.75 billion, debt repayments, and dividend payments during the period rather than weaker operating performance. Inventories increased to N53.60 billion from N45.82 billion, suggesting the company built stock ahead of expected demand or in response to procurement requirements. Contract liabilities, which represent customer advances, also almost doubled to N8.90 billion from N4.72 billion, indicating higher advance payments from distributors and customers.

Guinness closed its last trading day on Wednesday at N332.00 per share on the Nigerian Stock Exchange (NGX), recording a 5.12 percent decline from N349.90 per share reported at the beginning of the year.