Guinness Nigeria First Quarter (Q1) net profit decline by 76%

Guinness Nigeria Plc has reported a 76 percent drop in net profits Year-on-Year for the three months ended September 30, 2015.

The company’s quarter result, which is the first quarter of its financial year ending June 30, 2015, showed a profit after tax (PAT) decline from N1.485bn in 2014 to N362.3m in the period under review. Its profit before tax (PBT) also fell by 74 percent from N1.963bn to N517.5m, while basic earnings per share declined by 76 percent from N94 to N22.

However, Guinness saw a 3-percent Year-on-Year rise in sales revenue, from N21.048bn in 2014 to N21.74bn in the three months ended September 30, 2015.

The company saw an 18 percent increase in cost of sales from N10.499bn in 2014 to N12.437bn in the period under review. It also saw its distribution and administrative expense rise by 2-percent from N7.838bn to N8.00bn.

Guinness other income fell by 25 percent Year-on-Year from N193.10m to N144.24m.

In a statement released by the company, the Managing Director/Chief Executive Officer had this to say on the results:

“In the period under review, sales continued to grow despite a challenging trading environment, being 3% ahead of the same quarter last year. Despite the sales growth, gross profit declined by 12% versus the same period last year due to the impact of exchange rate devaluation, inflation, an increased share of value brands, together with the phasing of costs. Marketing, distribution, administrative and other expenses at N8bn were 2% ahead of the prior year. Reported operating profit at N1.4bn is 50% below the previous year but is significantly impacted by the phasing of costs which is expected to reverse during the rest of the year.”

According to analysts at FBN Capital Research, the weak performance at Guinness Nigeria reflects the prevailing macro headwinds, the tough operating environment and the squeeze on household wallet.

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