NIGERIA – Guinness Nigeria Plc, a subsidiary of Diageo Plc, has announced its audited results for the period ended 30 June 2021, revealing a 110% increase in profit after tax mainly driven by strong revenue growth across all key categories. 

Profit after tax rebounded to N1.25billion (US$3.03 million) from a loss of N12.6billion (US$30.58 million) reported in full-year ended June 30, 2020, audited results released to the Nigerian Exchange Group (NGX) revealed. 

Revenue, the major profit driver, increased 54percent to N160 billion (US$390 million) in 2021 from N104.4 billion (US$250 million) reported in 2020. 

Guinness Nigeria reported that operating profit for the period increased by  177% benefitting from lapping significant impairments in the prior year and reduced administrative expenses arising from productivity savings. 

Gross margins, however, declined by 3% driven by inflationary pressure, a shift towards more expensive can products given at-home consumption trends, and forex devaluation impacting some materials. 

The company however revealed that its net finance costs remained on a similar level as last year despite the lower debt position, due to the devaluation of Naira impacting the foreign currency-denominated trading balances. 

Speaking on the announcement, Mr. Baker Magunda, Managing Director, Guinness Nigeria Plc said: “The performance of fiscal 2021 showed that the business delivered growth despite the challenging external environment characterized by COVID-19 restrictions and high inflation.” 

“Revenues grew double-digit across all key categories, particularly our strategic focus brands Guinness, Malta Guinness as well as our local and imported spirits.” 

Going into the new fiscal year,  the company noted that it remained conscious of the continued challenging operating environment with double-digit inflation and pressured consumer income spending.  

“However, we will continue to focus on our strategy – optimising our route to consumer, innovating at scale to satisfy our consumers and improving cost control – as we continue to emerge stronger from the current crisis,” Magunda said. 

Guinness plots expansion in Lagos 

Earlier, Guinness Nigeria announced plans to expand its operations and production capacity in Lagos, over the next few months to meet growing demand for its products. 

The company revealed that it has already completed the acquisition of  25 acres of commercial property in the Ogba industrial area of Lagos for the expansion project. 

  “This bold acquisition comes with an ambitious investment plan of expanding our production capacity and operations in Nigeria,” Magunda said. 

“We remain steadfast in our commitment to Nigeria’s growth and development while enhancing our shareholders value in the long term.” 

Guinness Nigeria, with the support of Diageo PLC, its parent company, has consistently made investments for the long-term success and growth of its business in Nigeria. 

About 10 years ago, Diageo invested over N52 billion (US$130 million) in capacity expansion, the single largest investment of Diageo in any single market anywhere in the world.  

Then just two years ago, the company invested another N2 billion naira (US$4.85 million) in the ‘Grow with Nigeria’ programme, supporting over 27,000 farmers in its supply chain and enhancing their means of livelihood. 

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE