Guinness Nigeria laments hostile environment as company loses N2.2bn in Q1

Guinness Nigeria plc has expressed concern over the country’s hostile environment to businesses which has continued to take its toll on the company’s financial result.

The company’s financial statements made available to the Nigerian Stock Exchange over the weekend showed that the company had a Loss After Tax position of N2.2 billion within the period.

Peter Ndegwa, Managing Director/CEO of the company expressed the concern while announcing the company’s first quarter financial year ended 30 September 2016 report, adding that the firm had a 6 percent increase in its revenue during the period.

He mentioned that the increase was driven in part by contributions from the company’s new mainstream and international premium spirits business as well as the continuing growth of its value brands.

According to Ndegwa, “The environment remains tough but we have seen contributions from our mainstream and international premium spirits brands as well as continuing growth of Satzenbrau. These were the key drivers of the 6 percent revenue growth recorded for the quarter.

“Our cost of sales was impacted by the high inflationary environment and continuing currency devaluation leading to a reduction in operating profit. The higher finance cost in the quarter is due to the impact of unrealized foreign exchange losses as a result of the currency devaluation.”

Going forward, he said, innovation will continue to be a big part of the firm’s strategy as it looks to deepen its participation in the mainstream and value segments. He said: “We will also continue to invest behind our brands with a key focus on building the right portfolio for future growth and reshaping our organisation to take advantage of what is likely to continue to be a challenging market in the short to medium term.”

Citing long-term commitment to the Nigerian market as a key driver, Guinness Nigeria recently announced a further 12 million pounds of investments into Nigeria as it plans to commission a new spirits manufacturing line in its Benin plant in the coming weeks.

This investment will give a big boost to the company’s ambition to source 75% of its production raw materials locally in the next two years.