FX unification cost Guinness Nigeria N5.23bn loss
Amid foreign exchange unifiicaton, Guinness Nigeria Plc has declared N5.23billion loss in second quarter (Q2) ended December 31, 2023 from N4.02billion profit declared in second quarter of 2022.
The multinational company declared N4.43billion loss before tax in Q2 2023 from N7.23billion profit before tax in Q2 2022.
The losses can be attributable to N23.88billion finance expenses in Q2 2023 from N6.71billion finance expenses reported in Q2 2023.
The breakdown revealed that loss on remeasurement of foreign currency balances of about N7.28billion in Q2 2023 from N2.77billion in Q2 2022 and N3.7billion exchange difference on foreign currency loan from N2.77biillion reported in Q2 2022 contributed to the company’s finance expenses in the period under review.
From the profit & loss figures, Guinness Nigeria, declared N142.6billion revenue in Q2 2023 from N118.45billion in Q2 2022.
Guinness Nigeria characterized the 20 per cent growth in revenue to slow consumer spending due to escalating inflation, continuous Naira devaluation and, reduced cash in circulation.
The unaudited result released to the Exchange showed a 31per cent increase in operating profit in the period under review, while its reported revenue growth was primarily fueled by sound pricing strategies and a carefully optimized product mix, emphasizing the premium categories.
The Company further bolstered sales by increasing trade and consumer engagement initiatives, optimizing its route-to-consumer strategy to broaden its outlet coverage, and leveraging its digital capabilities. Key categories, particularly Malt and Ready-to-Serve, experienced notable revenue growth, while others demonstrated more modest increases.
Impressively, operating profit increased by 31per cent and the operating margin expanded by 90 basis points, fueled by nine per cent increase in gross profit, gains from other income (Export Expansion Grant), and reduced operating costs, even as brand investment increased by 15per cent.
The Managing Director/CEO of Guinness Nigeria Plc, Mr Adebayo Alli in a statement stated that “while this was a commendable performance in the face of very challenging macro environment, regrettably, the persistent devaluation of the Naira led to a substantial (N18billion) unrealized foreign exchange loss, which caused a 161per cent decline in profit before tax, closing the half-year at a loss of N4.4billion.”
He, however, stated that “management of the Company remains committed to taking all steps and proactive actions necessary to continue delivering value to its stakeholders.”
