Guinness Nigeria announces 19% fall in PAT

...excites shareholders with 320k dividend

Guinness Nigeria Plc has posted a profit after tax (PAT) of N7.79 billion for the financial year ended June 30, 2015, against N9.57 billion recorded in June 30, 2014.

This represents a decline of 19 per cent in PAT the breweries producing company announced to market stakeholders. 

Also, profit before tax also declined by eight per cent to N10.8 billion in 2015 from N11.68 billion in 2014.

The full year results revealed that high finance costs in a high interest rate environment negatively impacted overall profitability of the company.

The company appears to shrink under the weight of the economic pressures experienced last year occasioned by persistent fall in consumer disposal income while purchase preferences shift to accommodate the rising prices in petrol and a consequent rise in the price of transportation and energy requirement.

This development brings about 10 per cent increase in finance charges from N4.4 billion in 2014 to N4.87 billion in 2015 while operating expenses rose by 14 per cent to N40.9 billion in 2015 as against N35.9 billion recorded in 2014.

Revenue of N118.5 billion was reported in its 12 months audited result, against N109 billion recorded last year.

Meanwhile, the management of Guinness Nigeria excites shareholders with a dividend of N3.20kobo for the second consecutive year, a declaration of approximately N4.82 billion.

Basic earnings per share dropped by 19 per cent from N6.36 to N5.18.

From the financial structure, total equity recorded a decline of nearly eight per cent from N132 billion to N122 billion while total equity rose by seven per cent from N45.1 billion to N48 billion.

Commenting on the results, the Company’s Managing Director/Chief Executive Officer, Mr. Peter Ndegwa observed, “We delivered a nine per cent increase in net sales during the year in a tough trading environment largely driven by the growth in our RTD category and value beer segment.

“During the year, we continued to invest significantly behind our brands and our route to consumer expansion and these, together with the high interest environment, have driven a profit before tax decline of eight per cent.”

 On his part, Mr. Babatunde Savage, Chairman of the Board of Directors of the Company stated, “The current economic environment is challenging for all companies but we look forward to an improvement in the operating environment and are positioned to take advantage of improving consumer confidence that may occur as a result”.

 The share price of Guinness Nigeria appreciated by N0.99 to close last week Friday, August 4, 2015 at N128 from N127.01 it opened for trading activities.