By Tunde Osho
Guinness Nigeria Plc has said that half-year sales for the 2017/18 financial year through 31 December 2017 grew 18.6% to ₦70.6bn from ₦60bn in the same period in 2016.
The company behind iconic brands Guinness Foreign Extra Stout and Harp Lager among others said that it recorded ₦2.1bn in profit for the period, from a loss of ₦4.7bn in the prior year. Guinness saw double-digit gains in its value beer segment, driven by Dubic Lager and a 22% sales boost from its mainstream spirits, driven by innovation launches and new formats.
The brewer said it grew Gross Profit 31%, while trimming administrative expenses 22% as it continues to drive out costs and improve operational efficiencies. The firm’s profit was boosted by a 32% reduction in net finance cost to ₦4.7bn, benefiting from its recently concluded ₦39.7bn ($126m) rights issue, which enabled it pay down debts and strengthen its balance sheet. It noted that its debt to equity ratio has improved from 82% to 2%.
Commenting on the 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,” he said.
Continuing, Mr. Ndegwa said: “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.”
Guinness Nigeria is the country’s second largest brewer and subsidiary of British drinks maker Diageo. The company first started operations in Nigeria in 1963 and maintains a portfolio of iconic brands such as Guinness Foreign Extra Stout, Harp Lager, Dubic Lager and many others. In recent years, it acquired rights to Diageo’s International Premium Spirits (IPS) and United Spirits brands expanding its portfolio to include brands such as Johnnie Walker Scotch whisky, McDowell’s No. 1 among others.