Guinness Nigeria Cuts Borrowings, Lifts Profit to ₦25bn at H1 2026

Guinness Nigeria Plc continued its turnaround in the second quarter of 2026, delivering a strong balance sheet and improved profitability by sharply cutting debt and interest expenses while accelerating top-line growth.

The brewer’s after-tax profit rose 53 per cent year-on-year to ₦25.3 billion for the first half, underscoring a successful response to recent operating challenges.

The interim financial report for the half-year ended June 2026 shows that Guinness Nigeria reduced its borrowings from ₦44.4 billion at year-end 2025 to ₦23.4 billion by June, regaining the strength of equity financing as retained earnings swung positive and total equity grew from ₦43 billion to ₦64 billion.

A major reduction in finance expenses played a pivotal role in the company’s recovery. Finance costs dropped from ₦8.5 billion in Q2 2025 to less than ₦1.9 billion in Q2 2026, reflecting both lower debt and the absence of foreign exchange losses. Over the six months, finance expenses fell from ₦12.4 billion to ₦4.4 billion, while finance income surged from under ₦111 million to ₦1.2 billion, providing a significant boost to profit margins.

Sales performance also gained momentum in the second quarter. Revenue climbed above ₦142 billion, outpacing Q1’s ₦122.8 billion, with year-on-year growth reaching 20% compared to just 3.7 per cent in the first quarter. Crucially, cost of sales—which had previously grown twice as fast as sales—moderated in Q2, allowing sales growth (20%) to slightly outpace production cost growth (19.6%).

This favourable combination strengthened operating results. After a first-quarter decline, operating profit rebounded, rising 34 per cent year-on-year in Q2 to over ₦24 billion. For the half-year, operating profit increased 14.8 per cent to ₦41.5 billion, while gross profit improved by 9 per cent year-on-year to ₦97.5 billion.

The acceleration in sales, slowdown in cost of sales, and lower finance expenses were key drivers stretching profit margins in Q2. Guinness Nigeria delivered an after-tax profit of nearly ₦15 billion for the quarter, up 57 per cent from the prior year, and accounting for 59 per cent of the half-year’s ₦25.3 billion net profit.

For the first half of 2026, turnover stood at ₦265 billion, an 11.8 per cent year-on-year increase. While cost of sales rose 13.5 per cent—still above the growth in revenue—cost control measures in Q2 helped steady the company’s trajectory and diluted the impact of earlier cost pressures.

Pre-tax profit surged nearly 61 per cent to over ₦38 billion at the end of June 2026, and earnings per share rose to ₦11.55. In recognition of its improved financial position, Guinness Nigeria proposed an interim cash dividend of ₦7 per share—up from the ₦2 per share paid after Q1.

The improved second quarter performance has diluted the operating pressures of Q1 and steadied Guinness Nigeria on the path of sustainable profit growth for a second consecutive year.

Do you think Guinness Nigeria can maintain this momentum in the second half of 2026?