Guinness posts N3.5bn PBT in Q2 2018 result
.Posts H1 PAT growth of 145.65 % y/y
Guinness Nigeria has shown remarkable improvement in its earnings as the company’s key performance indices for the second quarter (Q2) 2018 results for the period ended 31 December 2017 reflected marked growth.
The company’s Q2 result released by the Nigerian Stock Exchange (NSE) showed that the company has recovered on balance sheet restructuring with strong topline growth by 35.9 per cent q/q and 11.5 per cent y/y.
However, the gross margin results was mixed with a negative of -117.8bps q/q and growth by 600.9bps y/y. Guinness in Q2 2018 posted contraction in operating expenses (opex) to sales ratio which declined -246.4bps q/q; and further dropped by -642.1bps y/y.
The company’s result showed recovery in profit before tax (PBT) which peaked at N3.5billion in Q2 2018 against N41million in Q1 2018.
According to the result, revenue grew to N40.7billion, reflecting expansion by 35.9 per cent q/q and 11.5 per cent y/y. Profit before tax enhanced to N3.50bn against N41.40million in Q1 2018, indicating 243per cent growth y/y. Profit after tax peaked at N2.1bn against N41.40m in Q1 2018, reflecting growth by 187 per cent y/y.
The company’s result for the half (H1 2018) year period further showed that revenue grew by 18.60 per cent year on year (y/y) to N70.56bn.
Profit before tax for the half year period closed higher at N3.54bn, buoyed by 175.95 per cent y/y, while Profit after tax for the period closed with 145.64 per cent growth y/y to peak at N2.1bn.
Although the increase in top line performance was partly attributable to a price hikes about 25 per cent of revenue growth, the company’s management revealed that revenue performance was mainly the result of volume increases in its value and mainstream brands.
Furthermore, the net interest expense performance may not be unconnected with the company’s recent right issue used to restructure its balance sheet.
This however led to a -71 per cent y/y decline in loans and borrowings contributing to the slide in net debt to equity ratio to 1.7 per cent as at Q2 2018, from 104 per cent as at Q2 2017.
On a sequential basis, Guinness’ results were reflective of the impact of the festive period and the lower base effect of Q1 2018 when the company reported PBT of N41m.
The Q2 2018 performance was due to the +35.9% q/q jump in revenues, -246bps slide in opex to sales ratio as well as the -80.9% q/q drop in net finance cost, which combined to more than offset the -117bps moderation in gross profit margin.
Stories: Bonny Amadi
