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Company Results

Diageo posts £2.2 billion operating profit, growth in Nigeria, others failed to offset decline

The parent company of Guinness Nigeria Plc, Diageo Plc, disclosed that its operating profit declined by 8.3%.



Guinness’ parent company expects alcohol sales to improve as restaurants and bars gradually reopen

Diageo Plc, the Parent Company of Guinness Nigeria Plc, reported that its operating profit declined by 8.3% to £2.2 billion at the end of H1 2020/21 of its accounting reference period.

The company revealed that Africa net sales were flat during the period under review, as growth in Nigeria and Africa Regional markets was not enough to offset declines in East Africa and South Africa.

READ: AfDB set to mobilize $25 billion to scale up African climate adaptation

In line with the information contained in the press release published by the spirit producer, Diageo revealed that it recorded a strong sequential performance improvement in all regions in 2021 compared to the second half of the fiscal year 2020.

The management of the company maintained that it will be expecting continued impact in the second half of fiscal 2021 from on-trade restrictions and disruption to Travel Retail.

READ: Vitafoam shares gain 9.6%, as company reports N4.11 billion as profit in 2020


  • Diageo’s net sales (£6.9 billion) down 4.5%, as organic growth of 1.0% was more than offset by the unfavourable exchange.
  • Operating profit (£2.2 billion) declined 8.3%, driven by unfavourable exchange and a decline in organic operating profit.
  • Organic net sales up by 1.0%, despite a significant impact from Travel Retail and on-trade restrictions.
  • North America was up by 12.3%, offsetting declines in other regions, except for Africa which was broadly flat.
  • Organic operating profit down by 3.4%, driven by channel and category mix.
  • Basic Earnings Per Share decreased by 14.6% to 67.6 pence
  • Interim dividend increased by 2% to 27.96 pence per share.

READ: Kellogg injects additional $420 million in Nigeria’s packaged food business

What they are saying

Diageo’s Chief Executive Officer, Ivan Menezes while commenting on the results said:

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“We delivered a strong performance in a challenging operating environment, returning to top-line organic sales growth during the half. We rapidly pivoted to the channels and occasions most relevant to consumers and invested in new opportunities. This more than offset the impact of on-trade restrictions and the decline in Travel Retail.”

“Organic operating margin improved compared to the second half of fiscal 20 driven by increased operating leverage and tight control of discretionary expenditure.

READ: MTN Nigeria posts N975.76 billion revenue for Q3 2020

“The decline compared to the first half of fiscal 20 reflected an adverse channel and portfolio mix. We expect margins to improve as the on-trade and Travel Retail recover and with the continued benefit of everyday efficiency.

“Our proprietary tools and data-led insights are enabling us to invest smartly in effective marketing and innovation. We continue to strengthen brand equity, premiumise our portfolio and expand our digital capabilities.”

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Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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Company Results

Dangote Sugar yearly revenue surge by 33%, announces a dividend of N1.50

Dangote Sugar Refinery Plc. recently declared a 33.0% Year to year growth in earnings to N29.8 billion for the financial year of 2020



Dangote Sugar Refinery to merge with Savannah Sugar, Dangote was $4.3 billion richer in 2019, Dangote Sugar announces closed period, ban insider shareholders from trading , Dangote Cement: Weak revenue performance, elevated OPEX weigh on earnings

Dangote Sugar Refinery Plc via the Nigerian Stock exchange recently declared a 33.0% Year to year growth in earnings to N29.8 billion for the financial year of 2020

The company also announced a dividend of N1.50 (vs N1.10 total dividend in 2019).

Dangote Sugar’s revenue expanded by 33.0% YoY amid strong volume growth in its 50 kg sugar offering (c.96.0% of total sales).

The company’s impressive outing amazed a significant number of stock pundits despite a surge in tax charges which partially offset some of the positive passthrough from border closures on earnings.

Gross margin expanded by 1.31ppts Year to Year to 25.08%, which we believe points to the effects of recent cost-containment measures and the slump in global raw sugar prices in 2020 amid the COVID-19 pandemic.

The raw sugar price dropped to as low $0.09/lb in 2020 and traded c.$0.13/lb on average during 2020 (-4.38% YoY)

What you should know: Dangote Sugar Refinery Plc (the Company) was incorporated as a Public Limited Liability Company on 4 January 2005, commenced operation on 1 January 2006, and became quoted on the Nigerian Stock Exchange in March 2007. Its current shareholding is 68% by Dangote Industries Limited and 32% by the Nigerian public.

The principal activity of the Group is the refining of raw sugar into edible sugar and the selling of refined sugar. The Group’s products are sold through distributors across the country.

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That being said, in spite of such impressive results from the N217 billion valued company experienced a surge in operational cost partly due to persistent FX scarcity.

Dangote Sugar reported a four-fold increase in finance cost, which can be largely attributed to the foreign exchange loss in its ordinary business operations, driven by persistent FX shortages and naira repricing at the exchange rate windows.

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Company Results

Zenith Bank spends N20 billion on IT in 2020, up 122%

Zenith Bank spent a whopping N20 billion on IT in 2020 more than double its 2019 spend of N9 billion. 



Nigeria’s largest bank by assets, Zenith Bank Plc, spent a whopping N20 billion on Information Technology in 2020, more than double its 2019 spend of N9 billion.  

A cursory view of the bank’s expense line for 2020 reveals that it spent N148.1 billion on other expenses compared with N129. 4 billion in the same period of the previous year. Information technology was the major driver of the bank’s expense line, making up about 15.5% of total operating expenses. 

Why this matters: Most banks are expected to record higher spend on information technology in 2020 due to forced work-from-home policies triggered by Covid-19. Apps such as Zoom, and Microsoft Teams went mainstream during the pandemic as most businesses increasingly depended on them to function. 

  • While remote working may have been a major contributor, the bank likely splurged heavily on software applications, cloud computing, SaaS, and investing in technology to drive its FinTech goals. 
  • Apart from Information Technology, the bank also spent more on AMCON levy during the year, incurring cost of N30.9 billion.  
  • A notable reduction in year-on-year expenditure was its spending on Hotels and Travels. The bank spent N1.8 billion in Travel and Hotels. 
  • Zenith Bank reported a record N230 billion in profit after tax for the year ended December 2020. The bank is now the largest bank by Total Assets, with over N8.4 trillion.

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