Nigeria brewery company Guinness released a shocking earnings report of N12.6 billion loss. As a result, the company says it will suspend dividend.
Guinness Nigeria earning result.
Commenting on the results, Managing Director/CEO, Guinness Nigeria Plc, Mr. Baker Magunda, said: “The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs and dine-in restaurants) which represent the major part of the consumption occasion for our products; and bans on celebratory occasions impacted sales.”
“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”
“Although Management worked diligently with regulatory authorities to minimise the impact, this hampered our distributors ability to restock and have our brands available for purchase,” he said.
“We also focused on cost management by reacting to the drop in demand by reducing operations for a month. Agile actions taken in the period impacted by COVID-19 complemented the work already undertaken throughout the year to reduce cost of sales by year end,” Magunda said.
Guinness Nigeria earning result.
- annual pretax loss of 17.07 billion naira ($45 million),
- its first huge loss in four years,
- 54% owned by UK-based drinks group Diageo
- Guinness Nigeria’s sales in the 12 months through June fell to 104.37 billion naira, down 21% from the year before
- pretax profit of 7.10 billion naira last year
- But the company cut its debt to 2.5 billion naira from 20.5 billion a year ago
- Shares fell to a two-week low of 14.3 naira, valuing the company at 21.5 billion naira. The stock has fallen 88% from its 2018 peak of 120.25 naira
Commenting on the results, Managing Director/CEO, Guinness Nigeria Plc, Mr. Baker Magunda, said: “The last quarter performance of fiscal 2020 was significantly impacted by restrictions due to COVID-19, exacerbating the already challenging economic environment. Closures of on-trade premises (bars, lounges, clubs and dine-in restaurants) which represent the major part of the consumption occasion for our products; and bans on celebratory occasions impacted sales.”
“Demand was also impacted by reduced consumer income, unemployment concerns due to the shutdown of a large number of businesses, and increases of VAT and excise throughout the year.”
“Although Management worked diligently with regulatory authorities to minimise the impact, this hampered our distributors ability to restock and have our brands available for purchase,” he said.
“We also focused on cost management by reacting to the drop in demand by reducing operations for a month. Agile actions taken in the period impacted by COVID-19 complemented the work already undertaken throughout the year to reduce cost of sales by year end,” Magunda said.