Nigeria: Guinness Nigeria’s profit before tax increases to N1.2 bln
Guinness Nigeria, a leading beverage and alcohol Company in Nigeria and a subsidiary of Diageo Plc, announced on October 26 its unaudited results for its first quarter period ended 30 September 2018.
The results which were released to the Nigerian Stock Exchange (NSE), showed that profit before tax increased to N1.2 bln 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 6% in the three months ended 30 September 2018. This was primarily driven by increased competition in the value beer segment, that more than offset growth across the rest of the business.
Gross profit declined 12% as a result of continued inflationary pressure on our raw material costs and volume declines. Marketing spend declined 8%, marginally ahead of net sales decline. Operating profit was down 37% largely as a result of the gross profit decline.
Speaking on the announcement, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria Plc said, “In the 3 months ended 30 September 2018 Guinness Nigeria delivered results that reflected the continued challenges in the operating environment and increased competition in beer category. Continued inflationary pressure on our raw material costs and volume declines impacted both gross profit and operating profit.
"Profit before tax however benefitted from a significant reduction in net finance charges as a result of the rights issue. Looking forward, we will continue to focus on the three strategic pillars of productivity, expansion of our portfolio, as well as the execution of the commercial footprint initiatives to improve performance in the business. Whilst we remain optimistic about the execution of our strategy, we note that the operating environment is likely to continue to be challenging 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 we are making the right investments in the company and our brands to ensure our long term competitiveness”.
He further stated that “the Board continues to support the Management in its efforts to build a business that can win in the market and deliver growth.”
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