12 February 2013

Nigeria: Guinness H1 Result - Revenue Rises By 5 Percent As Profitability Drops

Guinness Nigeria Plc on Monday released its half year results for the period ended December 31 2012, which show a five per cent growth in total revenue as well as 15 per cent decline in profitability.

As at Monday, the shares of Guinness have appreciated by 7.64 per cent this year. From N275 per share at the beginning of the year, the share price rose to N296 per share at the close of trading on Monday.

The half year result show that total revenue rose to N65.88 billion from N62.842 billion due to continued strong performance of key bands like Guinness Foreign Extra Stout, Malta Guinness and Harp Lager driving net growth sales over the period in review.

Though gross profit rose by 1.5 per cent to N28.53 billion from N28.12 billion, profit before tax dropped to N9.44 billion from N11.203 billion. Profit after tax similarly fell to N6.42 billion from N7.62 billion.

Speaking on the results, Mr. Seni Adetu, Managing Director/Chief Executive Officer, Guinness Nigeria Plc said that the company continues to invest strongly in its brands and infrastructure. "Over the period in review we have again showed our commitment to enhance our focus on distribution and support long term growth. Marketing spend also increased ahead of net sales as a result of our growth strategy."

Guinness Nigeria Plc, part of the Diageo Group of companies, listed on the Nigerian Stock Exchange in 1965, and with a shareholder base of over 75,000 shareholders, is one of the foremost quoted companies in Nigeria. In 2010, the company announced an investment of N52 billion in its Nigeria business with the intention of expanding its production and route to market infrastructure.

The company confirmed that the first phase of the expansion project has been completed with the commissioning of a first of its kind brewing technology in 2012.

This investment looks set to increase Guinness Nigeria's' stake in the beverage market with a substantial increase in production capacity and increased consumer access to Guinness brands.

Commenting on the state of the beverage market in Nigeria, Adetu observed that the business is upbeat about the future despite a continuing decline in the beer and malt market.

"We know that the beer market in Nigeria is undergoing a general decline but we are confident that there will be a reversal in this trend going forward. The critical thing for the management and board of Guinness Nigeria Plc is the confidence we have that our range of leading brands, our continued focus on distribution and our investment in our brands and people will deliver long term growth for the business."

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