Guinness Nigeria Plc, said on Tuesday it recorded a net loss of N2bn for the full-year ending in June 2016, down from N8bn profit it made in the previous year. The brewer blamed the loss on weak economic environment and foreign exchange headwinds.

Speaking on the results, Peter Ndegwa, Managing Director / Chief Executive Officer, Guinness Nigeria Plc, said that the combination of a tough economic environment and challenges with naira devaluation had a significant impact on Guinness Nigeria’s overall performance.

“Our performance this year was impacted by two major factors, one being the very tough economic challenges around consumer spending, driving consumer preferences towards value brands across the sector, the other, and more significant factor being the effect of FX policy and the devaluation of the Naira. When you take out the impact of the latter, our underlying performance for the year was broadly in line with the prior year in spite of the pressure on the top line.”

The company also reported a revenue decline of 14% to N102bn for the full-year, down from N118bn in the previous year. Cost of sales was 5.33% lower than the previous year; however, Gross profit margin declined by 24% to N42bn, from N55bn recorded in 2015. Operating profit also fell 72% to N4.4bn, down from N16bn last year. Net finance cost skyrocketed 39% to N6.8bn, up from N5.5bn in the previous year.

Similarly, the brewer had reported a net loss of N308m in its Q3 results ending in March 31 2016, citing a deteriorating economic environment, weak consumer demand and FX scarcity as reasons for the poor performance.

Mr. Babatunde Savage, Chairman, Guinness Nigeria Plc, said: “Despite the continuing deterioration in the operating environment, the Board is pleased to note that our core brands of Guinness Foreign Extra Stout and Malta Guinness are in growth and we now have a strong participation in the growing value segment of the market through Satzenbrau and Dubic. We have also started to see early signs that our decisions to acquire the distribution rights in Nigeria to the International Premium Spirits brands of Diageo and to invest in local capacity for spirits manufacturing are the right ones for the business.”

Guinness announced earlier this month it would be investing £12m ($15.9m) in its Benin City plant to begin the manufacture of locally produced mainstream spirits that can be offered to consumers at lower price point when compared to imported spirits.

Guinness Nigeria acquired the distribution rights for Diageo’s International Premium Spirits (IPS) like Johnnie Walker, Ciroc and Baileys in Nigeria in January 2016. Similarly, the company acquired the rights to distribute McDowell’s whisky, a mainstream spirits brand of United Spirits Limited (USL), a Diageo company in India.

Mr. Ndegwa said that “innovation continues to be a strong platform for us, we have a highly successful track record with about 60% of our beer and non-alcoholic business now comprised of innovation products launched in the past four years. So innovation continues to be one of our competitive advantages in this market and we have a strong innovation pipeline into F18”