Speaking on the results, Mr. Peter Ndegwa, Managing Director/CEO, Guinness Nigeria Plc said there are many bright spots for the company but that the challenging economic environment and high finance charges impacted results. “We now have both International Premium Spirits (IPS) and locally manufactured mainstream spirits within our portfolio and these contributed to revenue growth for the half year. Our accessible beer brands also continue to grow strongly. Our productivity agenda continues to gain momentum enabling us to keep our administrative and distribution costs under control while optimizing our investments to support our brands. The unrealised foreign exchange losses during the half year meant that our net finance cost grew by 166%. As a result of the high input costs (in part driven by FX) and the FX impact on financing costs, we recorded a Loss Before Tax of N4.6 billion.”
Mr. Babatunde Savage, Chairman of the Board of Guinness Nigeria Plc remarked: “We remain optimistic about the future of the company despite the prevailing challenging operating environment. We are confident that the steps we are taking to steer the business through these difficult times – including a comprehensive review of our capital structure, the expansion of our brand portfolio and our continued focus on reducing operating costs, will sustain the momentum we have in top-line growth and bottom line recovery.”
The company, a member of the global drinks group, Diageo Plc, this week, held an Extraordinary General Meeting (EGM) of its shareholders where it received approval for a Rights Issue to raise up to N40 billion, subject to the approval of the regulatory authorities. The approval set the company on course to raise funds it hopes to use to optimise its balance sheet to improve its financial and operational flexibility.
In November last year, the company commissioned a local spirits line at its Benin brewery to produce brands like McDowell’s and Smirnoff X1. Earlier in 2016, the company also acquired the distribution rights to Diageo’s international spirits brands like Johnnie Walker, Baileys and Cîroc. Guinness Nigeria was established in 1960 and has manufacturing facilities in Lagos and Benin.