Guinness Nigeria Plc has reported a loss after tax increase of 127.2 percent at N841.64 million for the first quarter ended September 30 as mounting input costs squeezed earnings.
The Diageo-owned company’s gross profit fell slightly to N7.01 billion, down from N7.94 billion achieved in the same period of 2019.
However, the first quarter saw volume recoveries following the easing of the COVID-19 restrictions and the gradual reopening of on-trade channels which account for a huge percentage of total sales.
Guinness Nigeria Declares N841.64m Q1 loss as mounting input costs squeezed earnings
Guinness Nigeria’s revenue grew by 11.6 percent at N30.02 billion from N26.89 billion printed in the first quarter in 2019 — this is the highest level of growth since the third quarter in 2018.
The increase was supported by multiple mid-single-digit price increases implemented on some of its products to cover for the Value Added Tax and excise duty increase since December 2019.
Guinness Nigeria’s cost of sales grew 21.4 percent at N23.01 billion from N18.95 billion, faster than revenue – while gross profit tanked at 11.71 percent in the first quarter.
Guinness Nigeria Renewed demand strength to prop Revenue in Q1
The surge in the cost of sales is due to the impact of surging inflation, and FX weakness and illiquidity on input costs. Marketing and distribution expenses reduced 11.15 percent from N5.20 billion in Q1 2019 to N4.62 billion in Q1 2010.
Administrative expenses also dropped slightly at N2 billion from N2.18 billion — a sign of operational efficiency on the part of management.
Net finance cost fell by 14.1 percent year-on-year as a 96.9 percent increase in finance income offset the 6.2 percent increase in finance costs; it also recorded N384.44 million in FX gains.
Guinness’ loss before tax declined by 14.3 percent year-on-year. However, following a N524.17 million tax deduction during the period, loss after tax increased by 127.2 percent to N841.65 million.
Guinness Nigeria Plc, a public company quoted on the Nigerian Stock Exchange, was incorporated in Nigeria on 29 April 1950, as a trading company importing Guinness Stout from Dublin.
The Company has since transformed itself into a manufacturing operation and its principal activities continue to be brewing, packaging, marketing and selling of Guinness Foreign Extra Stout, Guinness Smooth, Malta Guinness, Guinness Gold, Harp Lager, Smirnoff Ice, Satzenbrau Lager, Dubic Malt, Snapp, Orijin Spirit Mixed Drink, Orijin Bitters, Smirnoff Ice Double Black with Guarana, Orijin Zero and Orijin Herbal Gin, Baileys Delight, Gordons Moringa among others.