Business
Investors dump shares as Guinness Nigeria loses N4.7b in 6 months
Investors at the Nigerian stock market reacted with a seemingly overwhelming rush to sell as Guinness Nigeria Plc on Thursday announced that it posted a net loss of N4.67 billion in the first half of its current business year.
Guinness Nigeria’s share price at the Nigerian Stock Exchange (NSE) dropped by N3.50 or 5.0 per cent to close at N66.55, close to its 12-month low of N62.10.
The six-month report for the period ended December 31, 2017 showed that Guinness Nigeria’s sales rose by 19.4 per cent to N59.49 billion by December 31, 2016 compared with N49.84 billion recorded by December 31, 2015. Cost of sales jumped by 55 per cent from N28.44 billion to N43.94 billion.
The company posted a loss before tax of N4.66 billion in 2016 as against a profit before tax of N1.65 billion in 2015. Net loss after tax stood at N4.67 billion in 2016 as against net profit after tax of N1.17 billion in comparable period of 2015.
Speaking on the results, Mr. Peter Ndegwa, Managing Director, Guinness Nigeria Plc said there were many bright spots for the company but that the challenging economic environment and high finance charges impacted results.
“We now have both International Premium Spirits (IPS) and locally manufactured mainstream spirits within our portfolio and these contributed to revenue growth for the half year. Our accessible beer brands also continue to grow strongly. Our productivity agenda continues to gain momentum enabling us to keep our administrative and distribution costs under control while optimizing our investments to support our brands,” Ndegwa said.
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According to him, the unrealised foreign exchange losses during the half year meant that the company’s net finance cost grew by 166 per cent while high input costs driven partly by foreign exchange crisis and same foreign exchange impact on financing costs, impacted the bottom-line.
Mr. Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc said the brewing giant remained optimistic about her future despite the prevailing challenging operating environment.
“We are confident that the steps we are taking to steer the business through these difficult times – including a comprehensive review of our capital structure, the expansion of our brand portfolio and our continued focus on reducing operating costs, will sustain the momentum we have in top-line growth and bottom line recovery,”Savage said.
The company, a member of the global drinks group, Diageo Plc, earlier on Tuesday held an extraordinary general meeting of its shareholders where it received approval for a rights issue to raise up to N40 billion, subject to the approval of the regulatory authorities.
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JOHNSON PETER
January 27, 2017 at 11:46 am
No money, no beer . Recession is telling on stout , small stout goes for #250 while big stout goes for #320. Although stout remain the best brand of beer but so expensive. They need to reduce the price to gain back their customers.
yanju omotodun
January 27, 2017 at 3:56 pm
Must you encourage people to drink? What is good about drinking? I pray Guiness Nigeria will continue to lose out until they fold up. Drinking alcohol is a sin.
chichi emerue
January 27, 2017 at 11:34 pm
And you think they will bring down the price of things being increase. One thing about Nigeria is nothing comes down so easy for them but so easy to increase, bad country
Margret Dickson
January 27, 2017 at 3:45 pm
Actually, this is a bad luck forced on the company by the current government. It is when people are happy that they can think of relaxation. Most of the people consuming their products are not capable of doing so anymore because the federal government has crippled them financially
Animashaun Ayodeji
January 27, 2017 at 3:50 pm
This is only an intro as more businesses will still fall apart, Nigeria is officially not favoring businesses. There is inflation and money isn’t flowing in the economy at the same time. If things continue this way, Nigeria’s economy will collapse finally and it will take longer time to have it fixed.
yanju omotodun
January 27, 2017 at 4:17 pm
Nigeria’s economy won’t collapse. The way we talk most times is enough reason for Nigeria’s economy to collapse. We talk with frustration which has beclouded the sense of reasoning as if the economy is badly damaged to that extent. No one should talk down our economy again. Things are fallen in place for good.
Balarabe musa
January 27, 2017 at 4:21 pm
Nigeria’s economy won’t collapse. The way we talk most times is enough reason for Nigeria’s economy to collapse. We talk with frustration which has beclouded the sense of reasoning as if the economy is badly damaged to that extent. No one should talk down our economy again. Things are fallen in place for good.