Economy
Guinness Nigeria to Maintain Strong Market Position Amid Cost Pressures
By Dipo Olowookere
One of the leading brewery companies in the country, Guinness Nigeria Plc, has been tipped to maintain its strong market position despite the various challenges it is facing at the moment.
Share price of the company at the Nigerian Stock Exchange (NSE) has plummeted lately and at the close of market on Monday, it was down by 30 kobo to sell at N18 per share.
Last week, a local rating agency, Global Credit Ratings (GCR), assigned national scale issuer ratings of A+(NG) and A1(NG) in the long term and short term respectively to Guinness Nigeria Plc, with the outlook stable.
In a statement obtained by Business Post, GCR said Guinness Nigeria, which controls about 22 percent of the market share in the country, should remain relevant in the space as a result of its “well-diversified portfolio of strong brands spanning lager, stout, spirits and non-alcoholic beverages.”
However, it warned that heightened competitive pressure, coupled with the tough operating environment will continue to affect the organisation.
Guinness Nigeria is a subsidiary of Diageo Plc, a global brewing company with operations in more than 180 countries.
With Nigeria being one of its major markets, Diageo is committed to providing technical, strategic and funding support to the firm, which experienced growth in revenue supported by an increase in sales volume and addition of some new local products to its portfolio.
“Like other industry players, Guinness Nigeria has experienced rising margin pressure, triggered by the depreciation of the Naira, which has impacted the prices of imported raw materials and other locally sourced inputs.
“Cost pressures are expected to worsen in the medium term given the uncertainties in the Nigerian foreign exchange market, coupled with inability to fully pass on additional costs to consumers.
“This notwithstanding, management is confident that earnings margins will stabilise due to the efficiency initiatives, centred on cost rigour and high margin products, rather than volumes,” GCR said.
It said the spike in debt at FY16 and FY17 saw net gearing rise above 80 percent and net debt to EBITDA over 190 percent, from a low of 31.4 percent and 56.4 percent at FY15.
However, gross debt has reduced substantially since FY18, following the conversions of intergroup loans to equity and part settlement of outstanding bank facilities. Thus, net debt to EBITDA moderated to 86.1 percent at end-March 2020 (3Q FY20), while net debt to equity registered below 18 percent, comparing favourably to its major peers,’ the rating firm said, adding that interest coverage has improved to exceed 4x in FY19.
Later in the year, Guinness Nigeria plans to establish a commercial paper issuance programme to refinance its maturing short-term borrowings, as well as diversify sources of funding. Even when gross debt has been fairly elevated, Guinness has reported moderate gearing metrics.
“Guinness evidences a favourable cash conversion cycle that facilitates strong cash generation and liquidity. Nevertheless, the uncertainties in the currency market has forced the company to increase inventory holding to ensure sufficient raw materials are readily available.
“Access to liquidity remains strong with over N16 billion in unutilised bank debt and $23.1 million of intercompany loans available,” the statement said.
GCR noted that it considers the brewing sector to evidence lower cyclicality, the COVID-19 crisis has elevated downside risks for the sector, given its reliance on hospitality and entertainment to drive volumes, saying it “expects Guinness Nigeria to maintain its strong market position due to its entrenched brands.”
“An upward rating movement is contingent on a sustained growth in revenue and firmer margins that translates into more stable profitability and cash flows.
“Conversely, a worse than anticipated disruption to demand from COVID-19 and/or severe weakness in the consumer market, could see earnings fall substantially.
“Furthermore, excessive debt utilisation would see credit protection deteriorate, leading to a rating downgrade,” it said.
By Aduragbemi Omiyale
Shares of First Holdco Plc worth N45.0 billion issued through a private placement have been listed on the Nigerian Exchange (NGX) Limited.
A circular issued by the Head of Issuer Regulation Department of the NGX Regulation Limited, Mr Godstime Iwenekhai, disclosed that the equities were admitted for trading at the stock market on Monday.
According to the notice, the additional shares brought for listing to rank pari passu with existing shares of the organisation were 1,021,334,544 units.
These stocks were sold to one of the company’s major shareholders at a unit price of N44.06, amounting to N45.0 billion.
The total issued and fully paid-up shares of First Holdco, as a result of this listing, are now 45,475,027,677 ordinary shares of 50 Kobo each.
“Trading licence holders are hereby notified that an additional 1,021,334,544 ordinary shares of 50 Kobo each of First Holdco Plc were on Monday, June 22, 2026, listed on the daily official list of Nigerian Exchange Limited.
“The additional shares listed on NGX arose from the company’s private placement of 1,021,334,544 ordinary shares of 50 Kobo each at N44.06 per share.
“With the listing of the additional shares, the total issued and fully paid-up shares of First Holdco Plc have now increased to 45,475,027,677 ordinary shares of 50 Kobo each from 44,453,693,133 ordinary shares of 50 Kobo each,” the disclosure stated.
By Adedapo Adesanya
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has approved fresh import licences for petrol and diesel for the third quarter of 2026 (July – September) to prevent potential supply shortages in the domestic market.
According to a report by global energy intelligence firm, Argus Media, the latest approvals were issued to major downstream operators amid declining fuel stock levels and concerns over reduced petrol production at the 700,000 barrels per day Dangote Petroleum Refinery in Lagos.
The move comes as Nigeria continues to balance increasing local refining capacity with the need to guarantee adequate supplies of petroleum products across the country.
According to the Argus report, domestic firms, including AA Rano, AYM Shafa, Bono Energy, Nipco, Matrix Energy and Pinnacle Oil, received permits to import Premium Motor Spirit, popularly known as petrol, during the July-September period.
The publication further reported that the same companies, with the exception of Nipco, were granted approvals to import Automotive Gas Oil, commonly known as diesel. The fresh approvals follow an earlier batch of petrol import permits issued by the regulator in May, covering about 720,000 metric tonnes.
Quoting a regulatory source, Argus noted that many of the companies granted the latest approvals were among those that had received permits in previous rounds. “These are some of the same ones that previously received the PMS permits,” the source was quoted as saying.
It was also claimed that AA Rano and Matrix Energy each received approvals to import 180,000 metric tonnes of petrol. AYM Shafa received approval for 120,000 metric tonnes, while Pinnacle Oil received a permit covering 150,000 metric tonnes.
For diesel imports, Argus reported that AYM Shafa obtained a permit for 60,000 metric tonnes, while Pinnacle secured approval for 45,000 metric tonnes. The report stated that the import approvals were issued only recently, after being delayed from an initial target date of June 15.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.01 per cent on Tuesday, June 23, dragging the market capitalisation down by N25.91 billion to N2.544 trillion from Monday’s N2.570 trillion. Also, the NASD Security Index (NSI) decreased by 43.17 points to 4,239.34 points from 4,282.51 points.
The triplet price losers were Central Securities Clearing System (CSCS) Plc, which gave up N4.82 to trade at N75.00 per unit versus Monday’s closing price of N79.82 per unit. NASD Plc depreciated by N3.70 to close at N33.30 per share compared with the preceding day’s N37.00 per share, and Nitrox Industrial Gases Plc marginally lost 1 Kobo to sell at N21.41 per unit, in contrast to the previous session’s N21.42 per unit.
Tuesday’s trading data showed that the volume of securities traded by investors retreated by 35.9 per cent to 211,671 units from 330,034 units, and the value of securities fell by 82.9 per cent to N5.6 million from N32.7 million, while the number of deals doubled to 38 deals from 19 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 68.1 million units transacted for N4.7 billion.
GNI Plc also closed the trading day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, trailed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn