- Net finance charge significantly reduced by N1.7bn
The results which were released to the Nigerian Stock Exchange (NSE), showed that revenue for the period declined by 4% compared to same period last year. Growth in Spirits, Guinness and non-alcoholic Malta Guinness was offset by continued challenging operating environment in lager, as well as the impact of increased excise duty on value spirits. Performance was also impacted by the disruption caused by the General Election.
Cost of sales were flat versus last year while operating profit declined N3.3bn. However, the productivity initiatives around marketing spend and distribution expenses previously introduced mitigated some of the inflationary cost of sales pressure. Profit before tax declined by N1.6bn with operating profit decline partially offset by a reduction of N1.7bn in net finance costs year on year. Net profit after tax decreased by 16% to N4.25bn compared to same period last year.
Marketing spend declined by 4% as we continued to focus our investment behind the biggest growth opportunities Distribution expenses declined on the back of lower top line performance, while administrative expenses increased by 7%.
Commenting on the results for the quarter, Baker Magunda, Managing Director/CEO, Guinness Nigeria plc said, “In the quarter ended 31st March, 2019, Guinness Nigeria delivered results which reflect the continued difficult operating environment. While lager remains a challenged sector, Guinness and spirits recorded considerable growth, and our non-alcoholic malt drinks grew in the face of intense competitive pressure. These developments re-affirm our Total Beverage Alcohol portfolio strategy as a key driver of sustainable growth in the market and we will continue to focus on our strategy.”
“Whilst we are conscious of the continued tough operating environment with double digit inflation and pressured consumer spending, we remain optimistic about the execution of our strategy for the remainder of the 2019 financial year”. Baker Magunda concluded.
On his part, Mr. Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc, said, “The Board is confident that our strategy is sound, and we are making the right investments in the company to ensure long term competitiveness”. He further stated that “the Board continues to support the Management in its efforts to build a business that aims to consistently deliver growth for stakeholders.”