Guinness Nigeria Plc, one of the leading beverage and alcohol companies in Nigeria and a subsidiary of Diageo Plc, has reported a growth of N72.351 billion for the half year ended December 31, 2020, showing an increase of 5.9 per cent compared with N68.327 billion in the corresponding of the previous year.
Cost of sale rose by 11 per cent from N48.476 billion to N53.765 billion leading to a gross profit of N18.586 billion, as against N19.852 billion in 2019.
However, with the devaluation of the naira, financing costs increased significantly by 49 per cent from N1.625 billion to N2.422 billion despite a reduction in the net interest cost on the back of better cash generation.
Guinness Nigeria recorded a profit before tax (PBT) of N1.293 billion compared with N1.934 billion while a jump of 160 per cent in tax from N619 million to N1.611 billion impacted the bottom-line to a loss of N317 million, as against a profit of N1.315 billion in the prior period.
Commenting on the results, Managing Director/CEO, Guinness Nigeria Plc, Mr. Baker Magunda said: “In the half year ended 31st December 2020, Guinness Nigeria delivered results that reflected the continued regulatory, competitive and inflationary challenges in the operating environment in Nigeria.
“The second quarter of our financial year was significantly impacted by challenges such as the disruptions emanating from the #EndSars protests, the continued restrictions due to COVID-19 which impacted a lot of consumption occasions in the December holiday season, and continued challenged consumer spending in the midst of high inflation.
“Despite these challenges, the business recorded good progress against our strategic focus brands.”
According to him, they saw growth across locally produced and imported spirits, Malta Guinness, and Ready To Drink (RTDs) brands.
“Reduced export opportunities impacted Guinness although the local sales show single digit growth mainly driven by the continued success of the Guinness Smooth innovation. On the overall, it was encouraging to note that the growth is being driven by the brands and categories that the business has strategically chosen to play in,” he added.
Looking ahead, Magunda said they will continue to drive their strategy which has deliberate focus on key categories, continuing to innovate to meet consumer needs, and driving productivity.
“Whilst we are conscious of the continued challenging operating environment with double digit inflation, pressured consumer spending and the continued impact of the COVID-19 pandemic, we are positive about the execution of our strategy for the remainder of the 2021 financial year.
“We remain confident of the resilience of our total beverage alcohol portfolio strategy as a key driver of sustainable growth in the market,” he said.