Guinness Nigeria Plc has reported declines in revenue and profit for the full-year ending on 30th June 2019.
The company blamed sluggish sales in the lager and ready-to-drink segment as well as the impact of the second wave of a new excise duty on alcohol and tobacco that went into effect in June 2018 for the lower results. Revenue declined by 8% to N131.5bn from N143bn in the previous year.
The lower sales also impacted net profit which fell by 18% to N5.5bn from N6.7bn in 2018.
However, Guinness Nigeria noted that productivity initiatives around marketing spend and distribution expenses, which declined by 16% helped mitigate Operating Profit decline, which fell by 33% to N9bn from N13.3bn.
The company also benefitted from a decline in net finance cost by 46%, driven by the N40bn rights issue it initiated in 2017.
Speaking on the results, The Managing Director, Guinness Nigeria Plc, Mr Baker Magunda, said: “Revenue for the year declined by eight per cent, compared to the same period last year on the backdrop of an extremely challenging macroeconomic and competitive environment.
“The cost of the increase in excise duty at a time of stagnant consumer disposable income had to be absorbed by industry players. Despite the tough competitive landscape, we continue to see good growth performance from Guinness, spirits and the malt drinks.”
Magunda said that the combined effect of inflation, prior year royalties and accruals not approved by the National Office for Technology Acquisition and Promotion, led to a 17% decrease in gross profit for the year.
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