By Onome Amuge.
Despite facing severe macro-economic challenges such as rising inflation, currency devaluation, temporary cash scarcity and insecurity, Guinness Nigeria Plc, delivered an 11 per cent increase in its topline revenue and an operating profit of N23.4 billion in its full year period ended 30th June 2023.
The results which were released to the Nigerian Exchange Group (NGX), disclosed that the foremost total beverage alcohol company in Nigeria reported a gross profit surge by 8 per cent compared to the corresponding period in the previous financial year.
Further breakdown of the company’s financials indicated that cost of sales rose 13 per cent to N151.3 billion from N134.1 billion in the corresponding period of 2022.
In terms of expenditures, marketing expenses increased 2 per cent from N20.2 billion in June ending 2022 to N20.6 billion in the period under review. Distribution expenses were also up, 21 per cent from N17 billion in June ending 2022 to N20.6 billion in the full year period of 2023.
John Musunga,managing director/CEO, Guinness Nigeria Plc,in a statement, noted that the earnings and revenue growth resulted from strategic pricing and successfully deploying product mix across categories to counter cost inflation, and an optimized route-to-consumer approach that improved outlet coverage and the use of its B2B platform to improve distribution efficiency.
The statement also noted that revenue growth was particularly strong for the strategic focus categories, Stout, Ready-to-Serve, and Mainstream Spirits.
Musanga explained that although gross profit increased by 8 per cent compared to the previous year, the cost of sales increase outpaced revenue growth primarily due to the prevailing macro-economic headwinds, specifically inflation, currency depreciation and the illiquidity of the forex market.
“The intense volatility in the value of the Naira and the unavailability of forex in the official foreign exchange window adversely impacted the company’s financial performance. Specifically, the Central Bank of Nigeria floated all the exchange rate windows towards the end of Q4, causing a huge devaluation of Naira from N419 to N760 to $1, and this resulted in a massive N49.1 billion unrealised forex loss in the income statement,” Musunga said.
Omobola Johnson, the board chair of Guinness Nigeria Plc, remarked that despite macro-economic challenges, the board maintains confidence in the company’s well-considered strategy, anticipating continued strong value creation for all stakeholders in the medium to long term.
“It is a credit to management’s impressive performance, that, despite the macro-economic headwinds, the business delivered N23.4 billion underlying operating profit for the year ended June 30, 2023,”she added.
