Categories: Business

Guinness Grows …Revenue Leaps in Q3

Dupe Olaoye-Osinkolu/

Guinness Nigeria Plc, the nation’s leading alcoholic beverage manufacturer and a subsidiary of Diageo Plc, has released its unaudited results for the nine months ended March 31, 2017.

According to a statement released by Guinness, the company recorded a revenue growth of 29 per cent and a 6 per cent increase in gross profit when compared to the same nine-month period in 2016.

It says: “While the first half volume growth continued in the third quarter, the third quarter also benefited cycling a weak third quarter last year. Cost of sales increased by 47% in the nine months due to the challenging economic environment. Finance costs also increased significantly versus last year. As a result the financial statement released to the Nigerian Stock Exchange… included a company loss after tax of N2.6 billion for the nine months under consideration.”

Commenting on the results, Mr. Peter Ndegwa, the company’s Managing Director and Chief Executive Officer noted, in the statement, that the company’s significant revenue growth was striking in the challenging operating environment.

He said, “We have been able to deliver strong sales growth even in a challenging operating environment marked by a significant erosion of consumer disposable income. This encouraging result is attributable to increased volumes and the realization of pricing benefits. We have started to see the benefit of our broader portfolio product offerings across beer and spirits and across an increased variety of formats. We have also seen resilience in the performance of our premium core brands and improving growth of our more accessible brands.

“Our gross profit continues to be impacted by the significantly higher raw material costs as a result of devaluation and the significant local input inflation, but benefitted in the quarter from supplier rebates. The company continues to make progress on its commitment to drive out costs across a number of areas as shown by distribution expenses that are down 16% compared to the previous year. Our financing costs at N6.7 billion for the year to date include N1.9 billion of unrealized foreign exchange losses on hard currency liabilities. As a result, we have reported a N2.6 billion post tax loss versus a N0.9 billion profit in the prior year.

“While we are encouraged by the performance and results recorded this quarter, we remain realistic in our expectations for the full year. We are however confident that we have the right strategy to return to sustainable profitability and shall stay focused on its efficient implementation as we drive out costs, build out our portfolio and ensure we provide our consumers with options in the current pricing environment .”

The company affirmed that it would continue to consolidate its unique position as the only Total Beverage Alcohol Company in Nigeria.

It says, “This position has been strengthened over the past year since Guinness Nigeria acquired the right to distribute Diageo PLC’s international premium spirits (IPS) brands, including Johnny Walker, Baileys, Ciroc Vodka and Smirnoff Vodka in Nigeria in December 2015. Investment in its position was further entrenched in November last year when Guinness Nigeria commissioned a spirits manufacturing line at its Benin plant. These investments strengthen and capitalize on the spirits brand base of Guinness Nigeria, allowing the business to compete across all categories of the alcoholic beverage market thereby deepening its operations and creating the capacity and a strong pipeline for long term growth.”

0
Dipo

Dipo Kehinde is an accomplished Nigerian journalist, artist, and designer with over 34 years experience. More info on: https://www.linkedin.com/in/dipo-kehinde-8aa98926

Recent Posts

Are The Grammys Relevant Outside the United States?

Building Credibility For nearly eight decades, the Grammy Awards have stood as the pinnacle of…

11 hours ago

Disputed 5.3bn Shares: Court Adjourns Barbican/FBN Holdings Suit as Ecobank’s Recusal Motion Remains Pending

Justice Ayokunle Faji has adjourned further proceedings in the suit filed by Barbican Capital Limited…

2 days ago

Los Angeles Protects Undocumented Immigrants from Trump’s Deportation Plans with Sanctuary Ordinance

Segun Atanda/ The Los Angeles City Council has approved a sweeping "sanctuary city" ordinance designed…

2 days ago

Trump Could Face Prison After Second Term, Prosecutors Say

Segun Atanda/ New York prosecutors have opposed dismissing President-elect Donald Trump’s conviction for falsifying business…

2 days ago

MC Oluomo Flouts Court Order, Assumes Office as NURTW President

Femi Ashekun/ In a bold and controversial move, Musiliu ‘MC Oluomo’ Akinsanya, has defied a…

2 days ago

Tinubu Sacks Nnamdi Azikiwe University VC, Registrar … Dissolves Council

Matilda Omonaiye/ President Bola Ahmed Tinubu has dissolved the Governing Council of Nnamdi Azikiwe University,…

2 days ago