Guinness Nigeria, despite implementing price hikes, has reported a substantial loss for the nine-month period ending March 31, 2024. The company recorded an after-tax loss of N61.7 billion compared to a profit of N5.9 billion during the same period in 2023. This significant downturn comes despite a notable increase in revenue, which grew by 28 percent to N220.3 billion from N172.5 billion in the corresponding period last year.
Analysts attribute the revenue growth primarily to upward price adjustments, with average product prices rising by 43 percent year-to-date across Guinness Nigeria’s beer and mainstream spirit segments. However, the company faced challenges, particularly in managing its foreign exchange exposure, leading to a spike in net finance costs due to unrealized foreign exchange losses amounting to about N32.1 billion.
Despite a reduction in borrowings by 38.2 percent, Guinness Nigeria experienced a drop in net debt by 2.8 percent year-to-date to N29 billion, coupled with a 25.7 percent decrease in the company’s cash balance.
Adebayo Alli, the managing director and CEO of Guinness Nigeria Plc, acknowledged the ongoing macroeconomic challenges but expressed confidence in the company’s resilience. He emphasized a continued focus on innovation and operational excellence to meet evolving consumer preferences.
Guinness Nigeria intensified its efforts in consumer engagement and trade support, leveraging digital platforms. Categories such as non-alcoholic malt, ready-to-serve beverages, and international premium spirits saw substantial revenue growth, indicating the effectiveness of these strategies.
Guinness Nigeria had earlier implemented a price increase across its product range, citing rising production costs and the overall cost of doing business. The new price structure, effective from March 13, 2024, resulted in significant price hikes for several key products, with some experiencing increases of up to 80 percent.
Guinness Nigeria, a subsidiary of Diageo Plc based in the United Kingdom, has been operating in Nigeria since 1962. Despite its long history in the Nigerian market, the company faces ongoing challenges amidst economic volatility and evolving consumer preferences.
The company’s financial performance underscores the complexities of operating in Nigeria’s competitive and dynamic market, requiring strategic adaptation and resilience in the face of various challenges.
