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Guinness Nigeria 2018 FY Results Show 249% Rise in Profit

By Dipo Olowookere

Guinness Nigeria Plc on Wednesday released its financial results for the 2018 fiscal year ended June 30, 2018.

It the financial accounts, the leading brewery firm in the country delivered a solid performance in the period under review.

According to the company, its revenue increased by 14 percent from N125.92 billion in June 2017 to N142.98 billion.

The results, which were released to the Nigerian Stock Exchange (NSE), also showed improved operating margin, as benefits from the company’s productivity program more than offset sustained cost pressures.

An analysis of the financial scorecard by Business Post also revealed that the marketing spend increased 18 percent demonstrating sustained investment behind Guinness Nigeria’s brands, while the operating profit rose by 31 percent to N13.4 billion.

It was observed that there was a 54 percent reduction in finance costs following the rights issue, while the profit after tax was up 249 percent in the period under review.

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Commenting on the results, Managing Director/CEO of Guinness Nigeria Plc, Mr Baker Magunda, stated that, “Over the year ending 30 June 2018, despite continued challenges in the operating environment, Guinness Nigeria delivered a strong performance.

“Revenue increased by 14 percent as both beer and mainstream spirits’ net sales grew double-digit. In beer, Guinness, our largest brand, saw strong growth as it benefitted from increased marketing activations around football.

“Mainstream spirits also delivered double-digit growth driven by innovation launches and new formats.”

“During the year, gross margin was down 4 percent to 34 percent largely driven by inflationary pressure on our raw material costs.

“However, this was more than offset by reduced distribution and administration costs and resulted in operating margin improving 130bps. Marketing spend increased 18 percent, ahead of revenue growth, as we continue to invest behind our brands,” he said further.

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“Improved operating performance combined with lower finance charges have helped us deliver an overall PAT increase of 249 percent during year.

“The execution of our strategy is working as we delivered both top line growth and margin expansion while also increasing investment behind our brands. Looking forward, we will continue to focus on the three strategic pillars of productivity, expansion of our portfolio, as well as the execution of the commercial footprint initiatives to drive the business forward.

“Whilst we remain optimistic about the execution of our strategy, we note that the operating and competitive environment is likely to continue to be challenging in the 2019 financial year,” he added.

Chairman of the Board of Guinness Nigeria Plc, Mr Babatunde Savage, while also commenting on the results, said, “Guinness Nigeria has confidence in the Nigerian economy and will remain a major player in the country by continually investing, developing capacity and growing a portfolio that most suit the consumers’ needs for celebration and relaxation.

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“Our aim is to continue to add value to Nigeria not only through continued investments in local manufacturing and backward integration, but also through various Sustainable Development projects, enabling job opportunities and economic inclusion.”

“As a Board, it is heartening to see the impact of the rights issue coming through in the profitability of the company. The Board is confident that we are making the right investments in the company to ensure our long term competitiveness, and continues to support the management in its efforts to build a business that aims to consistently deliver growth for all stakeholders,” he added.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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