By Modupe Gbadeyanka
Leading alcoholic beverage manufacturer in Nigeria, Guinness Nigeria
Plc, has continued to show that it is a company that can survive under
any environment.
The firm, a subsidiary of Diageo Plc, released its unaudited results
for the nine months ended March 31, 2017 yesterday to the Nigerian
Stock Exchange (NSE) and details showed a revenue growth of 29 percent
and a 6 percent increase in gross profit when compared to the same
nine-month period in 2016.
While the first half volume growth continued in the third quarter, the
third quarter also benefited cycling a weak third quarter last year.
Also, cost of sales increased by 47 percent in the nine months due to
the challenging economic environment, while its finance costs rose
significantly versus last year. However, the company declared a loss
after tax of N2.6 billion for the nine months under consideration.
Managing Director and Chief Executive Officer of Guinness Nigeria, Mr
Peter Ndegwa, while commenting on the results, noted that the
company’s significant revenue growth was striking in the challenging
operating environment.
He said, “We have been able to deliver strong sales growth even in a
challenging operating environment marked by a significant erosion of
consumer disposable income.
“This encouraging result is attributable to increased volumes and the
realisation of pricing benefits. We have started to see the benefit of
our broader portfolio product offerings across beer and spirits and
across an increased variety of formats.
“We have also seen resilience in the performance of our premium core
brands and improving growth of our more accessible brands.”
Speaking further, Mr Ndegwa pointed out that, “Our gross profit
continues to be impacted by the significantly higher raw material
costs as a result of devaluation and the significant local input
inflation, but benefitted in the quarter from supplier rebates.”
He said the “company continues to make progress on its commitment to
drive out costs across a number of areas as shown by distribution
expenses that are down 16 percent compared to the previous year.”
“Our financing costs at N6.7 billion for the year to date include N1.9
billion of unrealised foreign exchange losses on hard currency
liabilities. As a result, we have reported a N2.6 billion post tax
loss versus a N0.9 billion profit in the prior year,” he stated.
“While we are encouraged by the performance and results recorded this
quarter, we remain realistic in our expectations for the full year.
“We are however confident that we have the right strategy to return to
sustainable profitability and shall stay focused on its efficient
implementation as we drive out costs, build out our portfolio and
ensure we provide our consumers with options in the current pricing
environment,” he said.
By Modupe Gbadeyanka
Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.
Adedapo Adesanya