Finance

Guinness Nigeria migrates from N841.6m loss to N4.04bn profit in Q1

Guinness Nigeria, Stanbic IBTC,

Guinness Nigeria Plc has migrated from N841.6 million losses reported in first quarter (Q1) ended September 30, 2020 to N4.04billion reported in first quarter ended September 30, 2021.

The subsidiary of Diageo Plc impressive performance in the period was driven by growth in revenue that gained 58 per cent to close Q1 2021 at N47.46 billion as against N30.02 billion revenue reported in Q1 2020.

The unaudited results which were released to the Nigerian Exchange Group (NGX) revealed a 117per cent increase in gross profit in the period to N15.24billion in Q1 2021 from N7.01billion in Q1 2020, despite the impact of continued COVID-19 related restrictions and ongoing economic challenges.

Commenting on the results, Managing Director/CEO of the company, Mr. Baker Magunda said: “In the 3 months ended 30 September 2021, Guinness Nigeria delivered exceptional results despite the challenging external environment characterized by continued restrictions related to COVID 19, high inflation and heightening operating costs.

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“Revenue grew by 58per cent to N47.4 billion, driven by resilient consumer demand and improved outlet coverage, as well as benefitting from headline price increases in key brands. Revenue grew across all key categories driven by our strategic focus brands, Malta Guinness and Guinness, as well as double-digit growth in local and imported spirits and the ready-to-drink category.”

“We are aware of the challenges in the operating environment, and regardless, our focus remains on delivering value to our stakeholders. This is why we continue to invest behind our strategic focus brands and categories, and to support the recovery of the on-trade, as seen in the 50% Marketing spend increase. Cost of sales also increased by 40%, largely due to sales volume growth, inflationary pressure, a shift towards more expensive can products and forex devaluation impacting imported materials.” He added.

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The company also revealed that despite the devaluation of the naira, itsnet financing costs decreased by 38% as a result of reduction in the net interest cost on the back of better cash generation; and Operating profit grew 1010per cent to N6.5 billion.

“As a business, we will continue to remain agile in doing business in Nigeria for the consistent delivery of growth for all stakeholders. We remain conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending. However, we continue to focus on our strategy – optimising our route to consumer, innovating at scale to satisfy our consumers and improving cost control – these elements we can control. We remain confident in our People, and in the execution and resilience of our Total Beverage Alcohol strategy as a key driver of sustainable growth in the market, ”Magunda said.

The Chairman of the Board of Guinness Nigeria Plc, Dr. Omobola Johnson assured that, “the Board will continue to support Management in its efforts to sustain global best practices aimed at consistently delivering business growth for stakeholders.

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“We remain confident that the strategy is comprehensive and robust, and that we are making the right investments in the company to ensure our long-term competitiveness.”

Thisday

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