Guinness Nigeria, a subsidiary of Diageo Plc, and a leading total beverage alcohol company in Nigeria has posted a revenue of N52.8 billion for its first quarter period ended 30 September 2022.
The unaudited result released to the Nigerian Exchange Group (NGX) showed a 20% increase in gross profit in the period under review, with double-digit revenue growth across all key categories. The increase has been achieved despite the impact of the challenging business environment with double-digit inflation and a heightened operating cost.
The Managing Director/CEO at Guinness Nigeria Plc, Mr Baker Magunda said the result is the outcome of a dedicated workforce. “The performance of Guinness Nigeria in Q1 2022 showed that the business delivered growth despite the challenging external environment. We have continued to deliver on our promise of growth, through strategic innovation, great partnerships, and futuristic thinking despite the challenges faced”, he said.
He added that “revenue grew by 11% to N52.8 billion, driven by resilient consumer demand and improved outlet coverage, as well as rollover benefits of price increases taken across all categories in 2021. Double-digit revenue growth was delivered across all key categories driven by our strategic focus brands, Malta Guinness and Guinness, as well as strong growth in locally manufactured spirits and the ready-to-serve category.”
The result further showed that gross profit was up 20% as revenue grew ahead of the cost of sales. Cost of sales increased by 7%; largely due to inflationary pressures and the Naira devaluation impacting imported materials.
”We have continued to invest behind our focus brands and categories which has given rise to an increase in marketing investment, up 48%, to support our growth priorities and spend ahead of peak season to secure performance during the festive period in Q2,” Magunda said.
Projecting into the next quarter, Magunda revealed that “irrespective of the continued challenging operating environment with high-level inflation and pressured consumer income spending, the business will continue to focus on strategic and innovative ways in making our business seamless thereby leading to the satisfaction of our consumers. We remain committed to strategic growth ensuring we deliver on our ambition to be the best performing, most trusted, and most respected consumer products company in Nigeria”.
The Chair of the Board of Guinness Nigeria Plc, Dr. Omobola Johnson assured that “the Board will continue to support the Management in its efforts to sustain global best practices aimed at consistently delivering business growth for stakeholders. “We remain confident that the strategy is comprehensive and robust, and that we are making the right investments in the company to ensure our long-term competitiveness” she said.
Net financing costs increased by 233% due to a foreign exchange revaluation impact with the devaluation of the official exchange rate of the Naira from N418/$ to N439/$. However, investments of excess Naira cash in fixed deposits with banks at higher rates provided some mitigation. Profit before tax was reduced to N4.0BN, a 32% decline vs. the same period last year. Lower corporate tax was driven by the reduction in operating profit and increased net finance costs.