Guinness Nigeria Plc, a leading beverage and alcohol Company in Nigeria and a subsidiary of Diageo Plc, today announced its unaudited results for the quarter ended 30 September 2019.
The results which were released to the Nigerian Stock Exchange (NSE), showed that revenue for the period declined by 4% compared to the same period last year.
Guinness Nigeria Plc said that the challenging macroeconomic environment, coupled with the competition, unfavourable mix performance and excise duty increases on both beer and mainstream spirits negatively impacted its first-quarter results ending in September.
Revenue for the drinks company fell by 4% to N26.9bn from N28bn in the same period in 2018. Operating profit declined by 59% to N682m, from N1.67bn, driven by the drop in revenue.
Commenting on the results, the company said, “These topline performance factors, and especially the excise duty increases, impacted our Gross Profit. However, operating profit reduction was mitigated by several cost line initiatives. Costs of sales benefited from improved efficiency plus a number of productivity initiatives, while distribution cost reduced by 16% through our efficient utilisation of fixed cost logistics assets.”
“Administration expenses were flat due to productivity gains offsetting inflationary cost pressures.”
“Meanwhile, our marketing spends increased by 8% as we continue our focus to invest in building equity in our brands, and also on other opportunities identified by our use of tools and talent.”
Operating Profit has decreased N0.97bn versus last year due to the net impact of the drivers down to Gross Profit, Pre-tax profits have also decreased by N1.59bn due to increases in net financing costs.
Guinness Nigeria said that its Board is confident that our strategy is sound, that we are making the right investments in the company and our brands to ensure our long-term competitiveness, and it will continue to support the management in its efforts to build a business that aims to consistently deliver growth for stakeholders.
