Guinness Nigeria Plc, reported its first-half results (6-months) on Thursday, for the period ending 31 December 2016.

The brewer of Foreign Extra Stout, Malta Guinness, among others posted a strong 19% revenue growth in the period under review to N59bn, from N50bn it recorded in the same period a year ago.

However, the company’s strong first-half showing was dampened by unrealized foreign exchange losses which drove up net finance cost by 166% to N4.6bn, from N1.2bn in the previous year. The resultant effect was a net loss of N4.67bn. In the same period a year ago, Guinness Nigeria posted a positive N1.2bn in profit.

In his remarks on the results, the Managing Director/CEO, Guinness Nigeria Plc, Mr. Peter Ndegwa, said that there are bright spots for the company but that the challenging economic environment and high finance charges impacted results.

“We now have both International Premium Spirits (IPS) and locally manufactured mainstream spirits within our portfolio and these contributed to revenue growth for the half year. Our accessible beer brands also continue to grow strongly. Our productivity agenda continues to gain momentum enabling us to keep our administrative and distribution costs under control while optimizing our investments to support our brands. The unrealised foreign exchange losses during the half year meant that our net finance cost grew by 166%. As a result of the high input costs (in part driven by FX) and the FX impact on financing costs, we recorded a Loss Before Tax of N4.6 billion.”

Mr. Babatunde Savage, chairman of the Board of Guinness Nigeria Plc, said:

“We remain optimistic about the future of the company despite the prevailing challenging operating environment. We are confident that the steps we are taking to steer the business through these difficult times – including a comprehensive review of our capital structure, the expansion of our brand portfolio and our continued focus on reducing operating costs, will sustain the momentum we have in top-line growth and bottom line recovery.”

Guinness Nigeria which is a subsidiary of Diageo Plc, this week, held an Extraordinary General Meeting (EGM) of its shareholders where it received approval for a Rights Issue to raise up to N40 billion, subject to the approval of the regulatory authorities. The approval set the company on course to raise funds it hopes to use to optimise its balance sheet to improve its financial and operational flexibility.

In November last year, the company commissioned a local spirits line at its Benin brewery to produce brands like McDowell’s No. 1 and Smirnoff X1. Earlier in 2016, the company also acquired the distribution rights to Diageo’s international spirits brands like Johnnie Walker, Baileys and Cîroc.