Guinness Nigeria loses N2b in first loss in 30yrs

Brewing giant, Guinness Nigeria Plc recorded a net loss of N2.02 billion in the immediate past year, its first loss over three decades.

The audited report and accounts of Guinness Nigeria for the year ended June 30, 2016 showed that the company recorded a loss before tax of N2.35 billion in 2016 in place of profit before tax of N10.8 billion in 2015.

Net loss stood at N2.02 billion in 2016 compared with net profit of N7.79 billion in 2015. The turnover of the multinational had dropped by 14 per cent from N118.5 billion in 2015 to N101.97 billion.

The board of directors of the company has decided to pay out N752.94 million from the reserves of the company as dividends for the 2016 business year compared with N4.82 billion distributed in 2015. Shareholders will receive a dividend per share of 50 kobo for 2016 as against N3.20 received for 2015.

Speaking on the results, Peter Ndegwa, Managing Director, Guinness Nigeria Plc, said that the combination of a tough economic environment and challenges with naira devaluation had a significant impact on the company’s overall performance.

“Our performance this year was impacted by two major factors, one being the very tough economic challenges around consumer spending, driving consumer preferences towards value brands across the sector, the other, and more significant factor being the effect of foreign exchange policy and the devaluation of the Naira,” Ndegwa said.

Read also: CBN’s MPC retains benchmark interest rate at 14%

According to him, when the impact of the foreign exchange was taken out, the underlying performance for the year was broadly in line with the prior year in spite of the pressure on the top line.

Mr Babatunde Savage, Chairman, Guinness Nigeria Plc, said that despite the continuing deterioration in the operating environment, the company’s core brands of Guinness Stout and Malta Guinness are in growth while the company now also has a strong participation in the growing value segment of the market through Satzenbrau and Dubic.

He said the company has also started to see early signs that the decisions to acquire the distribution rights in Nigeria to the International Premium Spirits brands of Diageo and to invest in local capacity for spirits manufacturing were the right ones for the business.

In January 2016, Guinness Nigeria acquired the distribution rights for Diageo, its parent company’s International Premium Spirits (IPS) like Johnnie Walker, Ciroc and Baileys in Nigeria. Also in the course of the financial year, the company acquired the rights to distribute brands from India’s United Spirits Ltd (USL) for brands like McDowell’s whisky. Guinness has also announced an investment of GBP12million into its Benin plant for the manufacture of mainstream spirits, locally produced spirits that are offered at a lower price point when compared to imported spirits.

“Following the acquisition of distribution rights for IPS and USL brands, we are the first and only total beverage alcohol (TBA) business in Nigeria offering the widest range of drinks – from adult premium non-alcoholic drinks (APNADS) to lager, stout, mainstream spirits and IPS. This puts us in a great position to continue to offer consumers quality brands, giving them a choice at every category and price point,” Ndegwa said.

RipplesNigeria …without borders, without fears

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now