Guinness Nigeria has announced its first quarter results for the period ended September 30, 2017 with increased revenue, gaining 30 per cent and bringing its earnings to N29.9 billion from N23 billion reported in first quarter of 2016.
The results reflect continued growth within the Spirits business as well as benefit of an expanding portfolio, however this was against the backdrop of lapping the inventory reduction last year.
The multinational breweries company migrated from a loss of N2.2 billion to N41.4 million in first quarter results of 2017.
The results, released to the Nigerian Stock Exchange (NSE), also saw the company’s marketing expenses increase by 12per cent indicating continued investment behind its brands, administrative expenses were reduced by 17per cent driven by the organisation’s Productivity agenda.
The company has put in place these processes and changes as part of its strategy to drive efficiency which will help position it for more sustainable growth.
Commenting on the quarter one results, Managing Director/CEO, Guinness Nigeria Plc, Peter Ndegwa said, “Although trading conditions continue to be difficult, we delivered a credible performance with a Net Sales growth of 30per cent for the quarter.
“This was against the backdrop of changes in commercial footprint in the prior year as well as benefit of an expanding portfolio. We also continue to see value from our focus on Productivity in areas like sales as we empower our teams for success on the frontline as well as driving efficiency in logistics. This has released resources that we are able to re-invest behind our brands.’
Ndegwa added, “A critical part of our strategy is to expand our portfolio and as we continue to innovate with the introduction of new brands and formats, our spending on A&P is critical to driving growth not just for our innovation brands but also for our core brands like Guinness and Malta Guinness.”
In January 2017, Guinness Nigeria received approval from its shareholders to raise 40billion naira from existing shareholders via a Rights Issue offering five new shares for every 11 held, at 58 naira each. The exercise which was successfully concluded at the end of August was 116 percent subscribed.
Ndegwa said, “The funds raised from the Rights Issue will be used to reduce the level of borrowings and consequently our funding cost. In particular we have used the funds to reduce our foreign currency loan by 60% which in turn will reduce the foreign currency volatility on our balance sheet.”