Guinness Nigeria Records Substantial Recovery in Q2 Profit
Nigeria’s largest brewer, Guinness Nigeria Plc, has reported a significant turnaround in its fortunes, with a pre-tax profit of N20.1 billion for the period ending December 31, 2024. This is a stark contrast to the pre-tax loss of N8.2 billion recorded in the same quarter of the previous year.
The latest results mark the company’s first quarterly profit since September 2023, when it reported a profit of N3.8 billion in its first quarter. The profit boost comes as Tolaram Group completes its takeover of operations from Diageo, the previous parent owner of the Guinness brand.
Tolaram acquired the Guinness Nigeria franchise in June 2024, and within six months, the company recorded its first quarterly operating profit. The second-quarter profit contributed to a significant increase in half-year pre-tax profits to about N4.1 billion, enabling the company to swing to its first half-year profit since December 2022.
Revenue growth was a key driver of Guinness Nigeria’s profit recovery, with the company reporting a record N133.7 billion in revenue for the quarter. This represents an 82.06% increase compared to the full year of 2023 and a 98.5% contribution from domestic sales. Revenue growth was accompanied by a surge in cost of sales, which rose by 107.54% year-on-year to N200.5 billion. However, gross profit increased by 28.45% year-on-year to N59 billion, despite a 33% increase in marketing and distribution expenses.
Operating profit declined to N11.2 billion, down from N16.3 billion in the previous year. However, the company’s operating profit margins rebounded to 13.2%, the highest since March 2022.
Net finance charges, which had previously been a major driver of losses, swung to a net gain this quarter. Finance expenses more than doubled to N71.1 billion in the quarter under review, but were more than offset by a surge in finance income totaling N63.9 billion. Gains from the remeasurement of foreign currency balances accounted for 99.51% of the finance income.
The turnaround in profitability is seen as a significant boost for the new owners of Guinness Nigeria Plc, as they work to revitalize one of Nigeria’s largest breweries. Tolaram Group has reported its first operating profit for the company in less than six months under its management.
The company has dismissed speculation about being delisted from the Nigerian Exchange following the mandatory takeover of shares from minority shareholders. Sources within the company maintain that there are no plans to delist at this time.
Guinness Nigeria’s revenue growth has been attributed to a variety of factors, including the company’s strong brand portfolio and the growing demand for beverages in Nigeria. The company’s commitment to innovation and customer satisfaction has also been highlighted as a key driver of its success.
As Guinness Nigeria continues to navigate its new ownership structure, it is clear that the company is poised for growth and expansion in the Nigerian market. With its strong brand reputation and commitment to quality and customer satisfaction, Guinness Nigeria is well-positioned to capitalize on the growing demand for beverages in Nigeria and become a leader in the industry.
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