Guinness reports 29% revenue growth in Q3

GUINNESS Nigeria Plc released its 2017 third quarter results Q3-17
results, with a revenue growth of 29% and a 6% increase in gross
profit when compared to the same nine-month period in 2016.

Cost of sales increased by 47% in the nine months due to the
challenging economic environment. Finance costs also increased
significantly versus last year.

As a result the financial statement released to the Nigerian Stock
Exchange included a company loss after tax of N2.6 billion for the
nine months under consideration.

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 ”.

The company continues to consolidate its unique position as the only
Total Beverage Alcohol Company in Nigeria.

This position has been strengthened over the past year since Guinness
Nigeria acquired the right to distribute Diageo PLC’s international
premium spirits (IPS) brands, including Johnny Walker, Baileys, Ciroc
Vodka and Smirnoff Vodka in Nigeria in December 2015.

Investment in its position was further entrenched in November last
year when Guinness Nigeria commissioned a spirits manufacturing line
at its Benin plant.

These investments strengthen and capitalise on the spirits brand base
of Guinness Nigeria, allowing the business to compete across all
categories of the alcoholic beverage market thereby deepening its
operations and creating the capacity and a strong pipeline for long
term growth.