By Chinwendu Obienyi
Rising demand and product price hike lifted Guinness Plc revenue by N118.45 billion in 2023 from N109.12 billion recorded in 2022.
This represents a 8.5 per cent increase in the company’s revenue.
According to a filing obtained from the Nigerian Exchange Limited (NGX)’s website at the weekend, on a quarter-on-quarter basis, revenue grew markedly by 24.1 per cent (Q1 2023: N52.85 billion) highlighting the festive-induced demand in the period.
The company’s gross profit grew to N42.29 billion from N36.51 billion in 2023 recorded in the half year (H1) of 2022, representing 15.8 per cent increase.
Elsewhere, a net finance cost of N3.45 billion was recorded in Q2 of 2023 (Q2 2022: N60.08 million), comprising finance costs of N4.25 billion (Q2 2022: N186.76 million) and finance income of N800.72 million (Q2 2022: N126.68 million).
The surge in loss on remeasurement of foreign currency balances (H1 2023: N2.77 billion vs N248.99 million in H1 2022), exchange differences on letters of credit (+367.9 per cent), and foreign currency loans (+433.0 per cent) underpinned the higher finance costs.
Compared to Q2 2022, Profit Before Tax (PBT) was down by 54.6 per cent y/y to N3.19 billion (H1 2023: – 44.2 per cent y/y). A tax expense of NGN1.92 billion resulted in a 73.3 per cent y/y decline in Profit After Tax (PAT) to N1.28 billion in the period (Q2 2022: N4.78 billion).
Also, the company’s OPEX increased by 15.6 per cent y/y in Q2 2023 (H1 2023: +26.4 per cent y/y), reflecting increased marketing and distribution efforts towards the brewer’s strategic focus brands and categories.
However, other income declined by 73.9 per cent y/y, resulting in EBIT and EBITDA margins of 10.1 per cent (-136bps) and 13.7 per cent (-142bps), respectively.
Commenting on the company’s H1 2023 performance, analysts at Cordros Research, said, its performance underperformed expectations, with the variance stemming from the higher finance costs recorded.
“Nevertheless, we look forward to a gradual recovery in earnings in the subsequent quarters as we believe the brewer remains well-positioned to maintain decent top-line growth.
“However, we expect results to continue to reflect the challenging operating conditions as pressured consumer wallet continues to weigh on sales, while weaker exchange rates, poor FX liquidity, and high inflation continue to impact costs. Our estimates are under review”, they said.