Guinness Nigeria PLC suffered losses as a result of unfavorable fluctuations in the foreign currency rate, as the brewer reported almost N62 billion for the first nine months of its 2024 fiscal year. Its profits performance scorecard suffered additional damage as a result of an increasing cost profile under Nigeria’s soaring inflation conditions.
In 9M-2023, Guinness Nigeria Plc declared a profit of N9.9 billion; nevertheless, pre-tax losses of N60.4 billion were recorded, according to information from its unaudited financial accounts that were filed with the Nigerian Exchange.
Analysts concluded that an 871.8% increase in financing expenses was the reason for its loss after taxes. Due to the ongoing pressure on the currency during the review, the breakdown of the financing costs showed that the majority of pressures were skewed toward losses on the FX balance.
In this period, Guinness Nigeria PLC’s revenue grew strongly as a result of price hikes and increased export sales. Revenue from the Nigerian market grew by +27.5% and Export proceeds grew by 48.9%. Its financials showed the revenue grew by 27.7% year on year to N220.303 billion at the end of 9 months results for 2024, from N172.5 billion in the comparable period in 2023.
But the company’s costs of sales rose faster, up by 36.2% year on year to N152.643 billion from N112.093 billion at the end of 9M-2023. Still, gross profit was 12% higher year on year, settling at N67.66 billion at the end of 9m-2024 results.
Its 9m-2024 Operating profit was 27.5% higher than what was recorded 12 earlier, settling at N22.218 billion, details from its unaudited financial statements revealed. Deal wrecker for the company’s solid top-line performance was a significant surge in its finance costs.
Pushed by losses from FX revaluation, Guinness Nigeria’s finance cost rose by 872% year on year to settle at N90.214 billion from N9.283 billion at the end of 9 months of financial year 2023.
This headwind for the company redirects profitability trajectory. Guinness Nigeria Plc then posted an N61.652 billion loss versus N5.866 billion profit in the comparable period. On Q3’24 standalone, the company’s performance was uninspiring, as material FX loss masked the 43.8% increase in revenue, resulting in a pre-tax loss of N56.0 billion in the review quarter.
