Guinness Nigeria grows revenue 20% to N142.5bn amid challenging macro environment

Business a.m

Guinness Nigeria has continued to demonstrate resilience as its revenue for the first half of the year ending 31 December 2023, rose 20 per cent year-on-year to N142.5 billion, despite a marked decline in consumer spending, exacerbated by rising inflation and currency devaluation.

In its unaudited results for the first half of the year, released to the Nigerian Exchange Group (NGX), Guinness Nigeria reported a 31 per cent increase in operating profit.  The leading beverage alcohol company in Nigeria explained that revenue growth was primarily fueled by sound pricing strategies and a carefully optimised product mix, emphasising the premium categories.

In addition to its pricing and product mix strategies, Guinness Nigeria also focused on improving its trade and consumer engagement initiatives and optimising its route-to-consumer strategy. This allowed the company to reach a wider range of outlets and consumers, boosting its sales. The malt and Ready-to-Serve categories, in particular, saw significant revenue growth, while other categories experienced more modest growth. 

Operating profit for Guinness Nigeria increased by 31 per cent during the reporting period, with operating margin expanding by 90bps. The impressive performance was driven by a 9 per cent increase in gross profit, as well as gains from other income (Export Expansion Grant) and a reduction in operating costs. Notably, this was achieved despite an increase in brand investment of 15 per cent. 

Adebayo Alli,the managing director/CEO of Guinness Nigeria Plc, commented on the financial report, noting that the company’s performance was commendable given the challenging macroeconomic environment. However, Alli acknowledged that the persistent devaluation of the naira had a negative impact on the company’s results, leading to an unrealised foreign exchange loss of N18 billion and a 161 per cent decline in profit before tax. This ultimately resulted in a net loss for the half-year of N4.4 billion.

The managing director reassured the company’s stakeholders that the management is committed to taking all necessary steps to continue delivering value. 

Omobola Johnson, the board chair of Guinness Nigeria, also commented on the results, expressing confidence in the company’s well-developed strategy and its ability to deliver value to stakeholders. Despite the challenging macroeconomic environment, she stated that the board is committed to supporting management in implementing the strategy in a sustainable manner.