Guinness Nigeria records N2 billion loss, blames ‘economic environment’
Guinness Nigeria Plc on Tuesday announced a financial result of N102 billion revenue for the period ended June 30, 2016, resulting in an overall Loss After Tax of N2 billion when compared to the same period last year.
Peter Ndegwa, Managing Director/Chief Executive Officer, said the combination of a tough economic environment and challenges with naira devaluation had a significant impact on the company’s overall performance.
“Our performance this year was impacted by two major factors, one being the very tough economic challenges around consumer spending, driving consumer preferences towards value brands across the sector, the other, and more significant factor being the effect of FX policy and the devaluation of the Naira,” said Mr. Ndegwa.
“When you take out the impact of the latter, our underlying performance for the year was broadly in line with the prior year in spite of the pressure on the top line.”
This year’s report was the company’s first set of results combining sales from both beer as well as International Premium Spirits (IPS) like Johnnie Walker and Baileys, following its acquisition of distribution rights from its parent company, Diageo, in January this year.
Babatunde Savage, Chairman, Guinness Nigeria Plc, said despite the continuing deterioration in the operating environment, the Board was pleased with the growth with the Guinness FES and Malta Guinness brands.
“We now have a strong participation in the growing value segment of the market through Satzenbrau and Dubic,” said Mr. Savage.
“We have also started to see early signs that our decisions to acquire the distribution rights in Nigeria to the International Premium Spirits brands of Diageo and to invest in local capacity for spirits manufacturing are the right ones for the business.”
In January 2016, Guinness Nigeria acquired the distribution rights for Diageo, its parent company’s International Premium Spirits (IPS) like Johnnie Walker, Ciroc and Baileys in Nigeria.
Also, within the financial year, the company acquired the rights to distribute brands from India’s United Spirits Ltd (USL) for brands like McDowell’s whisky.
Guinness also announced an investment of £12 million into its Benin plant for the manufacture of mainstream spirits, locally produced spirits that are offered at a lower price point when compared to imported spirits.
“Following the acquisition of distribution rights for IPS and USL brands, we are the first and only total beverage alcohol (TBA) business in Nigeria offering the widest range of drinks – from adult premium non-alcoholic drinks (APNADS) to lager, stout, mainstream spirits and IPS,” Mr. Ndegwa said.
“This puts us in a great position to continue to offer consumers quality brands, giving them a choice at every category and price point.
“Additionally, innovation continues to be a strong platform for us, we have a highly successful track record with about 60 percent of our beer and non-alcoholic business now comprised of innovation products launched in the past four years.
“So innovation continues to be one of our competitive advantages in this market and we have a strong innovation pipeline into F18.”
Source: Premium Times