Guinness Nigeria Plc, a subsidiary of Diageo Plc, has announced its audited results for the period ended 30 June 2022 revealing 1147% increase in profit after tax to N15.561 billion from N1.255 billion in 2021, with double-digit revenue growth across all key categories, despite the challenging macro environment.
The audited results which were released to the Nigerian Exchange Group (NGX) at the financial year-end indicated that revenue increased 29% to N206.8billion versus the prior period of 2021 which stood at N160.416 billion.
The revenue was enhanced on the back of Malta sales and RTD brands despite inflationary pressure and slim in household wallet.
At the analysts conference, the brewer said malta brand contributed 74% growth of the revenue to N60.722 billion from N34.968 billion in 2021 while Ready to Drink (RTD) spirits-based drinks followed with 56% of the revenue with N17.627 billion from N19.719 billion in 2021.
Net financing costs decreased by 94% as a result of reduction in the net interest cost, and investments of excess naira cash in fixed deposits with banks at higher rates.
The statement also noted that the business’ profit before tax increased to N23.7billion, a 310% growth vs. same period last year; and operating profit increased by 142% in the period under review. Higher corporate tax was driven by the increase in operating profit and reduced net finance costs.
What the company is saying
- Speaking on the announcement, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria Plc said: “The performance of fiscal 2022 showed that the business delivered growth despite the challenging external environment characterized by rising inflation and heightening operating costs. Gross profit grew 59% in the year as revenues grew ahead of cost of sales. Cost of sales increased by 17%; largely due to inflationary pressures, sales volume growth, Naira devaluation impacting imported materials, air-freight cost increases and a shift towards more expensive can products.
- “Strong double-digit revenue growth was delivered across all key categories driven by our strategic focus brands, Malta Guinness and Guinness, as well as strong growth in local and imported spirits and the ready-to-drink category. This growth reflects the benefits of price increases taken across all categories, leading in spirits, and followed by beer, and also the benefits of favorable brand mix.”
- The company however revealed that its Marketing spend increased 50% versus last year in line with its strategy to invest and support its growth priorities and the recovery of the on-trade, following the easing of Covid-19 restrictions.
- “Distribution expenses increased by 36% vs. last year primarily due to cost inflation on freight and diesel. The net result was a 142% increase in operating profit vs. prior year”, Magunda said.
- “Going into the new fiscal year, we are conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending. However, we will continue to focus on our strategy – leveraging technology to optimize our route-to-consumer, innovating at scale to satisfy ourconsumers and improving cost control. We remain confident about the execution and resilience of our Total Beverage Alcohol strategy as a key driver of sustainable growth in the market”, he added.
- The Chair of the Board of Guinness Nigeria Plc, Dr. Omobola Johnson assured that “the Board will continue to support Management in its efforts to build a business that aims to deliver growth consistently and sustainably for stakeholders.”
- “We remain confident that the strategy is comprehensive and robust, and that we are making the right investments in the company to ensure our long-term competitiveness” she said.
Key highlights
- Revenue increased 29% from N160.416 billion to N206.822 billion
- Marketing and distribution expenses grew by 43.32% to N37.35 billion in 2022 to N26.06 billion in 2021
- Net finance charges decreased -94% to N225.899 million from N4.101 billion