Guinness Nigeria records $67 million in profit for the first half of the 2018 financial year
Guinness Nigeria has announced its half year results for the period ended 31st December 2017. The company delivered revenue of $197 million, N70.6billion, and gross profit of $67 million, N24bn, representing an increase of 19% and 31% respectively over the same period last year.
The results showed topline growth driven by both spirits and beer reflecting the expansion of our portfolio, and improved operating margins with benefits from our productivity initiatives despite sustained cost pressures.
The results released to the Nigerian Stock Exchange (NSE), also saw marketing spend increase by 17% demonstrating sustained investment behind Guinness Nigeria’s brands. Administrative and distribution expenses declined driven by the company’s continuing focus on productivity.
Commenting on the half year results, Peter Ndegwa, Managing Director/CEO, Guinness Nigeria Plc said: “In a difficult operating environment notwithstanding recent signs of economic recovery, we delivered a strong performance with net sales growth of 19% for the half with growth in spirits and benefits of an expanding portfolio and also against the backdrop of lapping inventory reduction from prior year”.
“We believe in the continued execution of our strategy, allowing us to navigate a tough environment characterized by down trading of consumers as disposable income is subjected to additional pressure. We have made significant progress in driving productivity especially in the supply chain and the commercial function, even though cost pressures and inflation takes its toll.” Mr. Ndegwa added: “In this half we have also continued to innovate with increased marketing spend across our portfolio to drive the growth on our core brands and to fund our expanding portfolio and innovation pipeline.”
On successful completion of the rights issue exercise where Guinness Nigeria received approval from its shareholders to raise 40billion naira from existing shareholders via a rights Issue offering five new shares for every 11 held, at 58 naira each.
Mr. Ndegwa said: “The utilization of the rights issue proceeds leading to significant reduction of the Diageo loan and other borrowings, has resulted into a 32% reduction in the net finance charges and improved our debt to equity ratio from 82% to 2%.”