Guinness Nigeria Plc incurred a whopping N49 billion in exchange rate losses according to the information contained in its full-year results for the period ending June 2023.
The loss per share declared was N8.29 kobo versus N7.15 earnings per share a year earlier.
Key highlights
- Revenue for the year was N229.2 billion +10.9% YoY
- Gross profit was N78.1 billion +7.5% YoY
- Operating profit N23.3 billion -2.3%
- Net finance cost N45.4 billion +20040.1%
- Loss after tax N18.1 billion -216.1%
- Loans and advances N63.7 billion vs N31.3 billion YoY
- Cash generated from operations N57.3 billion vs N38.9 billion YoY
- Cash in bank N92.1 billion vs N69.1 billion
- The dividend declared is N15.6 billion compared to N1 billion YoY
- DPS is N7.14 per share +1452%YoY
Insights: The forex depreciation led the company to a loss of N18.1 billion, its first full-year loss since 2020 when Covid-19 ravaged company financials.
- Adjusting for the extraordinary forex loss of N49 billion, the company reported an operating profit of N23.5 billion.
- Thus without the forex charge, Guinness would have reported strong profits.
- Guinness also reported an unrealised exchange rate gain of N5.5 billion on foreign currency balances.
- Guinness has a related party dollar loan of $22.5 million which means the naira equivalent is now N17.9 billion compared to N9.4 billion as of December 2022.
- The company also has letters of credit related loans of about $33.8 million, EUR 18.8 million, and GBP 2.9 million at the end of the year.
- Trade and other payables denominated in forex also amount to $48.1 million, EUR 245, and GBP 5.5 million.
- Guinness still declared massive dividends as the losses will not immediately impact cash balances.
Good day please note that Guinness is not declaring a dividend for this year kindly make this correction
Why is that pls if I may ask?
Why not start dealing with the huge fx related losses now instead of putting it off for the future. Maybe they’re eyeing their share valuation in anticipation of additional equity capital raise in the near future to plug the hole.