Guinness Nigeria, a leading beverage alcohol firm in Nigeria, yesterday reported a profit after tax (PAT) of N5.483 billion for the year ended June 30, 2019, compared with N6.718 billion. The profit was realised from a revenue of N131.498 billion as against N142.975 billion in 2018.
Net financing income fell from N3.443 billion to N1.862 billion, while profit before tax was N7.103 billion, down from N9.943 billion in 2018. The board of directors has recommended a dividend of N3.329 billion.
Commenting on the result, the Managing Director, Guinness Nigeria Plc, Mr. Baker Magunda, stated that the company would continue to work on all operating indices while expecting that the micro and macroeconomic parameters improve.
Magunda said: “Revenue for the year declined 8% compared to same period last year on the backdrop of an extremely challenging macroeconomic and competitive environment. The cost of the increase in excise duty at a time of stagnant consumer disposable income had to be absorbed by industry players. Despite the tough competitive landscape, we continue to see good growth performance from Guinness, Spirits and the malt drinks.”
According to him, a combination of factors, inflation plus prior year royalties and accruals not approved by NOTAP, led to a 17 per cent decline in gross profit for the organisation.
“Marketing spend reduction by 16 per cent and distribution costs initiatives partly mitigated the gross profit decline, thus leading to a fall in operating profit by N4.4 billion. Profit before tax decreased by N2.8 billion as a 46 per cent reduction in net finance costs further helped to cushion the decline in operating profit,” Magunda explained.
Also speaking on the performance, Chairman of the company, Mr. Babatunde Savage, said: “As a board, we are confident that our strategy is sound, and that we are making the right investments in the company to ensure our long-term competitiveness. The Board will continue to support the management in its efforts to build a business that aims to consistently deliver growth for stakeholders.”
The company noted that despite the challenges, it continues to fulfill its commitment to stakeholders particularly as it drives its renewable energy and water recovery project for sustainable environment.