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Guinness’ profit declines 30% in nine months

By BusinessNews Staff on April 30, 2014

Guinness Nigeria Plc Monday announced its results for the nine months ended March 31, 2014, showing a decline of 30 per cent profit before tax. Analysts said with the decline in bottom-line for the nine months, shareholders should expect a likely slash in dividend at the end of the financial year (June 30, 2014).

According to the results made available at the stock market yesterday, the brewing firm recorded revenue of N78.08 billion, down by 11 per cent from N88 billion recorded in the corresponding period of 2013.

The company strived and reduced cost of sales by 13 per cent from N48 billion to N41.6 billion. Finance charges also grew marginally by three per cent from N2.528 billion to N2.596 billion. In spite of those cost curtailing efforts, profit before tax fell by 30 per cent from N11.234 billion to N7.823 billion.

Guinness also reduced its taxation by 48 per cent, from N3.6 billion in 2013 to N1.88 billion in 2014. Hence, profit after tax witnessed a decline of 22 per cent from N7.633 billion to N5.943 billion.

The market reacted negatively to the results leading to a decline of 5.9 per cent in its share price from N190 to close lower at N185.51 per share.

Guinness had similarly recorded a fall of 32 per cent in profit after tax for the six months ended December 31, 2013. Explaining the half year profit decline, Managing Director of Guinness Nigeria Plc, Mr. Seni Adetu attributed it to three major factors.

He listed down trading in the company’s value brand due to the discretionary income of consumers that was affected especially in the first quarter of that half year. Adetu also cited the aggressiveness with which the company priced its products as another reason.

The third factor, according to him, was the inability of the company to convert some of the opportunities they have around its retail consumers to real outcome.

[This Day]

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