- Revenue increased by 6%
- Operating Profit increased by 4%
- Cost of sales increased by 11%
- Net finance charges at N2.4bn
- Profit before tax decreased by 33%
Guinness Nigeria Plc, a leading beverage and alcohol Company in Nigeria and a subsidiary of Diageo Plc, today announced its unaudited results for its first half year period ended 31st December 2020. The results which were released to the Nigerian Stock Exchange (NSE), showed that revenue increased 6% and operating profit by 4% versus the same period last year, despite the challenging business environment. The results statement noted that Cost of sales increased by 11% in the half-year under review while Operating margin remained broadly flat compared to last year as the reduced marketing and distribution expenses, flat administrative expenses, and disposal of previously impaired assets mitigated the gross margin declines. With the devaluation of the Naira, financing costs increased significantly despite a reduction in the net interest cost on the back of better cash generation. Profit after tax was also impacted by a one-off historic settlement charge.
Speaking on the results announcement, Mr. Baker Magunda, Managing Director/CEO, Guinness Nigeria Plc said, “In the half year ended 31st December 2020, Guinness Nigeria delivered results that reflected the continued regulatory, competitive and inflationary challenges in the operating environment in Nigeria. The second quarter of our financial year was significantly impacted by challenges such as the disruptions emanating from the #EndSars protests, the continued restrictions due to COVID-19 which impacted a lot of consumption occasions in the December holiday season, and continued challenged consumer spending in the midst of high inflation. Despite these challenges, the business recorded good progress against our strategic focus brands.”
“We saw growth across locally produced and imported spirits, Malta Guinness, and Ready To Drink (RTDs) brands. Reduced export opportunities impacted Guinness although the local sales show single digit growth mainly driven by the continued success of the Guinness Smooth innovation. On the overall, it was encouraging to note that the growth is being driven by the brands and categories that the business has strategically chosen to play in.” he said.
“Looking forward, we will continue to drive our strategy which has deliberate focus on key categories, continuing to innovate to meet consumer needs, and driving productivity. Whilst we are conscious of the continued challenging operating environment with double digit inflation, pressured consumer spending and the continued impact of the COVID-19 pandemic, we are positive about the execution of our strategy for the remainder of the 2021 financial year. We remain confident of the resilience of our Total Beverage Alcohol portfolio strategy as a key driver of sustainable growth in the market”, he added.
On his part, Mr. Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc, said, “The Board is confident that our strategy is sound, and will in the long term continue to drive value to all stakeholders”. He further stated that “the Board continues to support the Management in its efforts to build a business that will consistently deliver growth for stakeholders.”