NIGERIA – Guinness Nigeria, a Diageo subsidiary operating in Nigeria, has reported a commendable 20 percent growth in revenue during the half-year ending December 31, 2023, reaching N142,595,584 (US$158,580.49) amid prevailing economic challenges.
The beverage demonstrated resilience in the face of a challenging macro-economic environment, marked by a decline in consumer spending, inflation, Naira devaluation, and reduced cash circulation.
The release of these unaudited results to the Nigerian Exchange Group (NGX) highlights a remarkable 31% increase in operating profit during the period under review.
The company attributed the revenue growth to sound pricing strategies and an optimized product mix, with a focus on premium categories. Guinness Nigeria has strategically enhanced sales by increasing trade and consumer engagement initiatives, optimizing its route-to-consumer strategy, broadening outlet coverage, and leveraging digital capabilities.
Key categories, particularly Malt and Ready-to-Serve, experienced notable revenue growth, while others demonstrated more modest increases. Operating profit increased by an impressive 31 percent, and the operating margin expanded by 90 basis points.
This growth was fueled by a 9 percent increase in gross profit, gains from other income, such as the Export Expansion Grant, and reduced operating costs, even as brand investment increased by 15 percent.
Despite these positive indicators, the Managing Director/CEO of Guinness Nigeria Plc, Adebayo Alli, acknowledged the impact of the persistent devaluation of the Naira.
He said, “While this was a commendable performance in the face of a very challenging macro environment, regrettably, the persistent devaluation of the Naira led to a substantial (N18bn) unrealized foreign exchange loss, which caused a 161 percent decline in profit before tax, closing the half-year at a loss of N4.4b.”
Alli reassured stakeholders, saying, “Management of the Company remains committed to taking all steps and proactive actions necessary to continue delivering value to its stakeholders.”
The Board Chair, Dr. Omobola Johnson, affirmed, “Despite the significant macro-economic challenges faced by the Company, the Board remains confident in the Company’s well-devised strategy and will continue to support management to implement the strategy in a manner that delivers sustainable value to all stakeholders.”
Last October, Guinness announced it was planning to stop the importation and distribution of certain Diageo international premium spirits effective April 2024.
It said that its discontinuation of the importation of spirits from the multinational alcoholic beverage company would reduce its foreign exchange requirements.
Also, Diageo will be setting up a Nigerian arm this year due to the discontinuation of the importation of its spirits.
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