Guinness Nigeria Plc has reported a loss of N5.233 billion for the year ended December 2023, primarily attributed to foreign exchange expenses. The unaudited interim financial statements, filed with the Nigerian Exchange Limited on Thursday, revealed the impact of forex challenges on the operating profit of the company.
Shareholders of the brewing company had expressed dissatisfaction with the non-declaration of an interim dividend for the period ending June 2023 during the 73rd Annual General Meeting held in Lagos. Addressing the concerns, the former Managing Director, John Musunga, attributed the loss to the forex harmonization policy of the Federal Government and explained that best practices required sufficient retained earnings or profits for dividend declarations.
Guinness Nigeria’s revenue for the end of 2023 saw a 20.38% increase to N142.595 billion. However, rising costs of sales, including marketing and distribution expenses (N23.790 billion), administrative expenses (N8.264 billion), and a 255.79% surge in finance expenses to N23.884 billion, led to a loss of N5.233 billion. This marked a significant decline from the N4.024 billion profit recorded in 2022.
A breakdown of finance expenses showed that forex challenges continued to affect the company. The loss on remeasurement of foreign currency balances was a major contributor, along with exchange differences on foreign currency loans and accrued interest.
In October, Guinness announced plans to discontinue the importation and distribution of certain Diageo international premium spirits from April 2024. This move was intended to reduce the company’s foreign exchange requirements. Following the discontinuation, Diageo plans to establish a Nigerian arm, focusing solely on spirits, with popular products like Johnnie Walker, Singleton, and Baileys.
Guinness Nigeria faced forex challenges earlier in 2023, reporting a N49 billion exchange rate loss in its half-year operations. Despite the Central Bank of Nigeria’s currency market harmonization in June, the company encountered difficulties accessing forex for its operations.
