Guinness Nigeria Plc (GUINNESS) announced a 97.2% YoY plunge in its Q3’19/20 results (January 2020 to March 2020), following material contraction in revenue and an over five-fold YoY surge in finance cost.
Revenue declined by 17.6% YoY in the review quarter, with inflows from export sales notably plunging by c.78.6% YoY over the last three quarters. The company also saw a reversal of revenue gains from H1’19/20 (June 2019 to December 2019), with 9M’19/20 result revealing a 5.3% YoY decline in sales
In line with the result of an industry giant (NB), GUINNESS also reported growth in marketing and distribution expense (+9.5% YoY) in Q3’19/20 to highlight high promotional intensity in the sector. However, the cumulative expense on this front failed to translate to revenue growth in the review quarter
Finance cost surged by over five-fold YoY to N1.7 billion in the review quarter, likely reflecting foreign currency losses on the company’s dollar obligation (c.$23.0 million intercompany loans as at June 2019)
Despite pressures across P&L line items, the company managed to improve operating cash flow by 20.4% YoY over 9M’19/20 through better working capital management of receivables and payables.
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