Guinness Nigeria Plc released its second-quarter earnings, revealing a pre-tax profit of N20.1 billion for the period ending December 31, 2024.
This marks a significant reversal of fortunes from the pre-tax loss of N8.2 billion reported in the same quarter of the previous year.
It is also the first quarterly profit posted by Guinness Nigeria Plc since September 2023, when it reported a profit of N3.8 billion in its first quarter.
The profit boost comes as Tolaram Group completes its takeover of operations from Diageo, the previous parent owner of the Guinness brand.
Tolaram acquired the Guinness Nigeria franchise in June 2024, and within six months, the company recorded its first quarterly operating profit.
The second-quarter profit helped increase half-year pre-tax profits to about N4.1 billion, enabling the company to swing to its first half-year profit since December 2022.
The pre-tax profit for FY 2024 stood at N4.1 billion, indicating a substantial recovery from the loss of N4.4 billion recorded in the previous half-year.
The company reported revenue of N133.7 billion for the quarter, bringing the year-to-date figure to N259.6 billion—an 82.06% increase compared to the full year of 2023.
Key highlights (2024 vs. 2023 FY)
- Revenue: N259.6 billion, +82.06% YoY
- Cost of sales: N200.5 billion, +107.54% YoY
- Gross profit: N59 billion, +28.45% YoY
- Other income: N159 million, -93.67% YoY
- Marketing and Distribution expenses: N31.6 billion, +33.00% YoY
- Operating profit: N11.2 billion,
- Finance expenses: N71.1 billion, +197.75% YoY
- Finance Income: N63.9 billion, +1993.90% YoY
- Pre-tax profit: N4.1 billion,
- Post-tax loss: N302.7 million
Surge in revenue boosts margins
Guinness Nigeria Plc reported revenue of N259.6 billion for FY 2024, representing an impressive increase of 82.06% compared to FY 2023.
- Domestic sales accounted for a substantial 98.5% of total revenue, while export sales contributed the remaining 1.5%.
- Despite the strong revenue growth, the cost of sales surged by 107.54% year-on-year, rising from N96.6 billion in the previous year to N200.5 billion in 2024.
- However, the company recorded a gross profit increase of 28.45% year-on-year, reaching N59 billion, compared to N45.9 billion in FY 2023.
- Marketing and distribution expenses also increased significantly, rising by 33.00% to N31.6 billion from N23.7 billion in the prior year.
- With rising operational expenses, operating profit declined to N11.2 billion, down from N16.3 billion reported in the previous year.
Nairametrics analysts observed that the primary driver of Guinness Nigeria’s profitability was a surge in topline revenue, which hit a record N133.7 billion this quarter—the highest ever recorded by the company.
The revenue surge helped mitigate cost pressures, delivering an operating profit of N18.1 billion.
Guinness reported an operating loss of N6.8 billion at the end of September 2024, its first quarter of the current financial year. Operating profit margins, however, rebounded to 13.2%—the highest since March 2022, when margins stood at around 18.5%.
Meanwhile, net finance charges, which had been a major driver of losses in recent years, swung to a net gain this quarter.
- Although finance expenses more than doubled to N59.5 billion in the quarter under review, this was offset by a surge in finance income totaling N63.9 billion.
- This turnaround was primarily driven by gains from the remeasurement of foreign currency balances, which accounted for 99.51% of the finance income.
- The swing in profitability will be seen as a significant boost for the new owners of Guinness Nigeria Plc, as they work to revitalize one of Nigeria’s largest brewers.
- Tolaram Group, which acquired Guinness in June 2024, has reported its first operating profit for the company in less than six months under its management.
Nairametrics understands that while there has been speculation about Guinness Nigeria potentially being delisted from the Nigerian Exchange following the mandatory takeover of shares from minority shareholders, sources within the company maintain that there are no plans to delist at this time.
Editor’s Note: This story has been updated to clarify that Guinness Nigeria has no plans to delist from the Nigerian Exchange, contrary to an earlier statement suggesting otherwise.