Guinness suffers N3.3bn losses in operating profit
Guinness Nigeria Plc said its operating profit fell N3.3 billion amid difficult business environment in the third quarter (Q3) ended March 31, 2019.
Similarly, profit before tax also declined by N1.6 billion, while net profit after tax decreased by 16 per cent to N4.25 billion compared to corresponding period of last year, just as the cost of sales was flat compared to same period 2018.
However, the brewer said it recorded N1.7 billion reductions in financing costs, which helped to manage its operations.
It also explained that productivity initiatives around marketing spend, and distribution expenses previously introduced mitigated some of the inflationary cost.
The company’s marketing spend declined by four per cent, as it continued to focus investment behind the biggest growth opportunities, with distribution expenses declining too on the back of lower top line performance, while administrative expenses increased by seven per cent.
The results, released to the Nigerian Stock Exchange (NSE), showed that revenue for the period declined by four per cent compared to the same period of 2018, as growth in some product lines were offset by challenges in others.
Besides, the impact of increased excise duty on the value of its products, particularly the spirits, was significant, coupled with assessed impact of the disruption caused by the general elections.
The Managing Director/Chief Executive Officer of the company, Baker Magunda, said: “In the quarter ended 31st March, 2019, Guinness Nigeria delivered results which reflect the continued difficult operating environment. While lager remains a challenged sector, Guinness and spirits recorded considerable growth, and our non-alcoholic malt drinks grew in the face of intense competitive pressure.
“Whilst we are conscious of the continued tough operating environment with double digit inflation and pressured consumer spending, we remain optimistic about the execution of our strategy for the remainder of the 2019 financial year”.
But the Chairman of the company, Babatunde Savage, added: “The board is confident that our strategy is sound, and we are making the right investments in the company to ensure long term competitiveness.”