Guinness Nigeria takes a hit from FX revaluation, posts N12 billion loss in three months

Guinness Nigeria Plc reported a net loss of N12.2 billion for the quarter ending September 30, 2024 (Q1 2025), representing a sharp 568 per cent decline from the N2.6 billion net profit recorded in the same period of the previous financial year.

The company’s losses were driven by a drop in sales volume which was reflected by the decline in the gross profit margin, as well as FX revaluation losses of N8.4 billion during the quarter. This marks a 153 per cent year-on-year decline from the N3.3 billion FX losses recorded in Q1 2024.

According to the company’s financial statement for the quarter, Guinness Nigeria posted a revenue of N125.9 billion during the quarter, representing a 111 per cent year-on-year growth from the N59.5 billion revenue posted in Q1 2024. However, our centre’s cost increased by 170 per cent year-on-year to N111.6 billion, and there was a 21 per cent decline in gross profit to N14.3 billion, in contrast with N18.1 billion as of Q1 2024.

Guinness’ marketing and distribution expenses during Q1 2025 were N13.3 billion, representing a 60 per cent year-on-year growth from N8.3 billion as of Q1 2024. The company posted a pre-tax loss of N16 billion during the quarter under review, in contrast with the N3.8 billion net profit posted in Q1 2024.

During the quarter, Guinness’ total assets appreciated by 9 percent to N246 billion, from N226.1 billion, from the start of the financial year. HoHoweverente to the losses, the company entered an integrative equity position, with a negative equity of N10 billion, as against shareholders’ fund of N2.2 billion at the start of the year.

A review of the company’s balance sheet shows that there was an increase in the negative working capital to N140 billion at the end of Q1 2025, from N120.4 billion at the start of the financial year.

Within the quarter, the sale of Diageo International’s stake in Guinness Nigeria to Tolaram Group, with Girish Sharma assuming the position of Managing Director in the company. A review of the company’s loans and borrowing profile shows that within the quarter, Guinness paid off its N39.3 billion loans to Diageo International. However, the company took a new N30 billion letter of credit loan during the quarter.