By Goddy Egene
Guinness Nigeria Plc, a subsidiary of Diageo Plc, has announced its audited results for the year ended June 30, 2020, showing a decline in revenue and a loss due to the significant impact of COVID-19 lockdowns and ongoing economic challenges.
The audited results showed that Guinness Nigeria reported a revenue of N104.376 billion, showing a decline of 21 per cent from N131.498 billion in 2019. Operating loss printed at N12.832 billion in 2020. But an increase of 131 per cent in net finance cost to N4.24 billion, from N1.86 billion made the company to end the year with loss before tax of N17.07 billion, compared with a profit before tax of N7.10 billion in 2019. However, tax credit of N4.495 billion reduced the loss after tax to N12.58 billion as against a profit after tax of N5.48 billion in 2019. Due to the loss, no dividend has been recommended for the shareholders.
Commenting on the results, Managing Director/CEO, Guinness Nigeria Plc, Mr. Baker Magunda, said: “The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs and dine-in restaurants) which represent the major part of the consumption occasion for our products; and bans on celebratory occasions impacted sales.”
“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”
He added that distribution was further impacted by the ban of inter-state, and in some cases intra-state travel.
“Although Management worked diligently with regulatory authorities to minimise the impact, this hampered our distributors ability to restock and have our brands available for purchase,” he said.
The MD, however, revealed that its reaction to the challenges presented by the COVID-19 lockdown in Q4 was centered around reducing risk to the business by focusing on cash delivery, reducing distributor inventories, and fast-tracking the ongoing distribution transformation project for efficient sales operations. This focus ensured a reduction of trade receivables by 88 per cent over same period last year.
“We also focused on cost management by reacting to the drop in demand by reducing operations for a month. Agile actions taken in the period impacted by COVID-19 complemented the work already undertaken throughout the year to reduce cost of sales by year end,” Magunda said.