Guinness explains 14 percent slide in profit after tax

bg-guinnessGuinness Nigeria Plc has attributed the 14 per cent loss in profit recorded in its 2016 operations to a combination of tough economic environment and effect of  naira devaluation.

The Managing Director/Chief Executive Officer of the company, Peter Ndegwa, explained that the combination of a tough economic environment and challenges with naira devaluation had a significant impact on the firm’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.

He added: “On the other, and more significant factor being the effect of foreign exchange (FX) policy and the devaluation of the Naira. 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.”

Also, the Chairman of the company, Babatunde Savage, however noted that its core brands of Guinness FES and Malta Guinness are in steady growth, adding that the firm currently  a strong participation in the growing value segment of the market through Satzenbrau and Dubic.

“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.”

The company declared revenue of N102 billion and loss after tax of N2 billion for the period, representing a reduction of 14 per cent when compared to the same period last year, resulting in a Loss After Tax of N2 billion.

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 in the course of the financial year, the company acquired the rights to distribute brands from India’s United Spirits Ltd (USL) for brands like McDowell’s whisky.

The firm has also announced an investment of GBP12m 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.

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Guinness Nigeria Plc
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