Guinness Nigeria, a subsidiary of Diageo Plc, experienced a staggering after-tax loss of N61.7 billion for the nine-month period ending March 31, 2024, despite implementing significant price increases. The company’s financial report showed a stark contrast to the N5.9 billion profit recorded during the same period in 2023.
Despite a notable 28 percent growth in revenue, reaching N220.3 billion compared to N172.5 billion in the previous year, analysts from FBNQuest expressed disappointment with Guinness’ performance in the third quarter of 2024. They highlighted a loss-before-tax of N56 billion, attributing the growth in revenue primarily to elevated product prices, which surged by 43 percent year-to-date across the beer and mainstream spirit segments.
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The surge in net finance costs, mainly due to an unrealized foreign exchange loss of approximately N32.1 billion, contributed to the company’s financial challenges. Despite a 2.8 percent decrease in net debt and a significant reduction in borrowings, Guinness Nigeria faced mounting pressures amidst economic volatility.
Adebayo Alli, the managing director/CEO of Guinness Nigeria Plc, acknowledged the persisting challenges within the macroeconomic environment. However, he expressed confidence in the company’s resilience and its ability to navigate through uncertainty. Alli emphasized the company’s unwavering commitment to innovation and operational excellence to meet evolving consumer preferences.
Furthermore, Guinness Nigeria intensified its focus on consumer engagement and trade support, leveraging digital platforms to drive growth. Notably, categories such as non-alcoholic malt, ready-to-serve beverages, and international premium spirits witnessed substantial revenue growth, reflecting the effectiveness of these strategic initiatives.
Guinness Nigeria had previously implemented a price increase across its product range, citing rising production costs and operational expenses. The company notified customers of the price adjustments, which resulted in significant increases ranging from 40 to 80 percent across various product lines.
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Despite these measures, Guinness Nigeria faces continued financial challenges, shown by the recent substantial loss and mounting economic pressures. As the company goes through these turbulent times, stakeholders await further developments and strategic interventions aimed at restoring profitability and sustaining growth in the long term.