Guinness Nigeria Declares N5.23bn Loss In Q2 2023

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Guinness Nigeria Plc has declared an N5.23 billion loss in the second quarter (Q2) ended December 31, 2023, from a N4.02 billion profit declared in the second quarter of 2022.

The multinational brewer manufacturing company on the floor of the Nigerian Exchange Limited (NGX) posted N4.43 billion loss before tax in Q2 2023 from N7.23 billion profit before tax in Q2 2022.

The losses can be attributable to N23.88 billion finance expenses in Q2 2023 from N6.71 billion finance expenses reported in Q2 2023.

The breakdown revealed that loss on remeasurement of foreign currency balances of about N7.28billion in Q2 2023 from N2.77billion in Q2 2022 and N3.7billion exchange difference on foreign currency loan from N2.77 billion reported in Q2 2022 contributed to the company’s finance expenses in the period under review.

From the profit & loss figures, Guinness Nigeria declared N142.6 billion in revenue in Q2 2023 from N118.45 billion in Q2 2022.

Guinness Nigeria characterized the 20 percent growth in revenue as slow consumer spending due to escalating inflation, continuous Naira devaluation and reduced cash in circulation.

The unaudited result released to the Exchange showed a 31 percent increase in operating profit in the period under review, while its reported revenue growth was primarily fueled by sound pricing strategies and a carefully optimized product mix, emphasizing premium categories.

The Company further bolstered sales by increasing trade and consumer engagement initiatives, optimizing its route-to-consumer strategy to broaden its outlet coverage, and leveraging its digital capabilities. Key categories, particularly Malt and Ready-to-Serve, experienced notable revenue growth, while others demonstrated more modest increases.

Impressively, operating profit increased by 31 percent and the operating margin expanded by 90 basis points, fueled by 9 percent increase in gross profit, gains from other income (Export Expansion Grant), and reduced operating costs, even as brand investment increased by 15 percent.

The Managing Director/CEO of Guinness Nigeria Plc, Mr Adebayo Alli in a statement stated that “while this was a commendable performance in the face of a very challenging macro environment, regrettably, the persistent devaluation of the Naira led to a substantial (N18 billion) unrealized foreign exchange loss, which caused a 161 percent decline in profit before tax, closing the half-year at a loss of N4.4 billion.”

He, however, stated that “management of the Company remains committed to taking all steps and proactive actions necessary to continue delivering value to its stakeholders.”

Also commenting on the results, the Board Chair, Dr. Omobola Johnson stated that ”despite the significant macro-economic challenges faced by the Company, the Board remains confident in the Company’s well-devised strategy and will continue to support management to implement the strategy in a manner that delivers sustainable value to all stakeholders.”

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