- Profit Before Tax growth of N251m
- Net finance charge significantly reduced by N2.3bn
- Revenue declined 4%
- Operating profit declined by N2bn
Guinness Nigeria Plc, a leading beverage and alcohol Company in Nigeria and a subsidiary of Diageo Plc, today announced its unaudited results for its first half year period ended 31st December 2018.
The results which were released to the Nigerian Stock Exchange (NSE), showed that profit before tax increased to N3.8bn driven by lower finance charges, as a result of the rights issue, which more than offset operating profit decline in a challenging operating environment.
Guinness Nigeria net sales declined 4% in the half year ended 31st December 2018. This was primarily driven by the ongoing pressure in the lager segment as a result of the continued challenging operating environment. Double digit growth in spirits and continued growth in Guinness mitigated some of the decline in the period. Gross profit declined 15% as a result of net sales decline, as well as continued inflationary pressure on our raw material costs and lower fixed cost absorption. Marketing spend decreased 10% as we continued to focus our investment behind the biggest growth
Operating profit declined N2bn as the productivity initiatives around marketing spend, distribution expenses and administrative expenses mitigated some of the inflationary cost of sales pressure.
Speaking on the announcement, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria plc said, “In the half year ended 31st December 2018, Guinness Nigeria delivered results that reflected the continued challenges in the operating environment. While lager remains a challenged sector, Guinness and spirits recorded strong growth, and our non-alcoholic malt drinks grew in the face of intense competitive pressure. This re-affirms our Total Beverage Alcohol portfolio strategy as a key driver of sustainable growth in the market. Looking forward, we will continue to focus on our strategy which is now based on four strategic pillars of growing our premium core faster, delivering our target cost absorption, continue innovating to meet consumer needs and driving productivity harder to improve performance in the business. Whilst we are conscious of the continued challenging operating environment with double digits inflation and pressured consumer spending, we remain optimistic about the execution of our strategy for the remainder of the 2019 financial year”.
On his part, Mr. Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc, said, “The Board is confident that our strategy is sound, and we are making the right investments in the company to ensure long term competitiveness”. He further stated that “the Board continues to support the Management in its efforts to build a business that aims to consistently deliver growth for stakeholders.”