February 19, 2014

Guinness posts N53bn turnover in six months


Guinness Nigeria Plc has recorded a turnover of N53 billion for the half year period ended 31 December 2013.  The company results appeared to be impacted by continuing softness of the beer market.

Other performance indicators show that Guinness Nigeria’s first-half profit declined 22 percent as sustained weakness in consumer spending caused a slump in beer sales.

Net income fell to N5 billion  ($30.7 million) in the six months through December, compared with N6.42 billion a year earlier, the parent company, Diageo Plc said in a statement  on the Nigerian Stock Exchange , NSE website. Revenue declined 13 percent to N 52.8 billion.

Disposable income “continues to be challenged” by an increase in gasoline prices two years ago, Guinness Nigeria Chief Executive Officer,  Seni Adetu, said on a conference on Monday.

While the beer market in Africa’s most populous country showed some recovery in the second quarter, government spending in order to secure votes ahead of elections next year hasn’t been as strong as expected, impacting sales, he said.

Speaking on the results,  Adetu said continuing decline in discretionary income amongst other factors, has continued to affect the performance of the business in the year under review. “Our performance for the period ended 31st December 2013 has been impacted by the contraction of the beer market for most of the half and the shift towards the value segment mainly due to affordability and discretionary income trends.”

He continued, “Contributions from strategic innovations have remained strong, as we continue to invest in our sales organisation to drive increased distribution and to support long term growth. Our marketing investments behind our brands also continued as we launched a new campaign for Guinness FES and Harp.”

Babatunde Savage, Chairman, Guinness Nigeria Plc, said that the Board continues to support the management in its efforts to continue to grow the business and deliver shareholder value.

“We will continue to manage our cost base tightly to deliver moderate operating margins improvement. The Board is confident that our focus on our strategic priorities will return the business back to growth and improved profitability.”

Guinness Nigeria was established in 1962 and was the first country to have a Guinness brewery built outside of the British Isles. Nigeria now represents the largest market for Guinness by Net Sales Value in the world. Products from the brewer’s stables include Guinness Foreign Extra Stout, Harp Lager Beer and Malta Guinness.