Guinness Nigeria plc, Nigeria’s second largest brewer is posting another huge loss for nine months ending on March 2017.
Net profit for the period fell to 2.5 billion against NGN864.1 million profit recorded in the financial year 2016.
Total revenue was actually up by 20% to NGN89.8 billion revenue against NGN69.6 billion recorded same quarter 2016.
Its costs of sales for the period was NGN57.6 billion against NGN39.3 billion recorded in the previous year.
Tue company said it’s gross profit increased to NGN32.1 billion in contrast to NGN30.2 billion in 2016 while its operating profit was NGN4.1 billion versus NGN3.6 billion recorded in fiscal 2016.
Guinness Nigeria said it recorded NGN2.6billion loss before tax against NGN1.2 billion profit recorded in 2016. After deducting its tax for the period, the loss for the period was NGN2.5 billion against NGN864.1 million profit recorded in the financial year 2016.
Guinness Nigeria plc said in its report that it acquired NGN156.3 billion assets in the year in review against NGN139.6 billion recorded in the previous year. Its liabilities for the period was NGN117.9 billion against NGN95.3 billion recorded in 2016.
Commenting on the results, Mr. Peter Ndegwa, the company’s Managing Director and Chief Executive Officer noted that the company’s significant revenue growth was striking in the challenging operating environment.
“We have been able to deliver strong sales growth even in a challenging operating environment marked by a significant erosion of consumer disposable income.
This encouraging result is attributable to increased volumes and the realisation of pricing benefits. We have started to see the benefit of our broader portfolio product offerings across beer and spirits and across an increased variety of formats. We have also seen resilience in the performance of our premium core brands and improving growth of our more accessible brands.”
He added, “Our gross profit continues to be impacted by the significantly higher raw material costs as a result of devaluation and the significant local input inflation, but benefitted in the quarter from supplier rebates.The company continues to make progress on its commitment to drive out costs across a number of areas as shown by distribution expenses that are down 16% compared to the previous year. Our financing costs at N6.7 billion for the year to date include N1.9 billion of unrealised foreign exchange losses on hard currency liabilities. As a result, we have reported a N2.6 billion post tax loss versus a N0.9 billion profit in the prior year.”
“While we are encouraged by the performance and results recorded this quarter, we remain realistic in our expectations for the full year. We are however confident that we have the right strategy to return to sustainable profitability and shall stay focused on its efficient implementation as we drive out costs, build out our portfolio and ensure we provide our consumers with options in the current pricing environment ”.
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