Guinness Nigeria Plc reported a nine percent increase in revenue for the first half of the 2022 financial year, according to a statement released on Saturday. The company also noted a 16 percent rise in gross profit, despite a five percent increase in the cost of sales. This growth occurred within a challenging business environment marked by inflation and the effects of naira devaluation on imported materials during the review period.
In his statement, Managing Director and Chief Executive Officer Mr. John Musunga highlighted that the results for the half year ending December 31, 2022, reflected the ongoing regulatory, competitive, and inflationary challenges in Nigeria’s operating environment. He pointed out that the period was characterized by escalating inflation, declining consumer disposable income, and a deteriorating foreign exchange situation. Nevertheless, the business made significant progress with its strategic focus brands.
Musunga emphasized that, despite the strong performance in the same quarter of 2021, revenue grew by nine percent. This growth was attributed to price and mix optimization, as well as resilient consumer demand and improved outlet coverage, which enhanced the company’s route to consumer. Revenue growth was observed across most categories, driven primarily by strategic focus brands such as Guinness, Ready-to-Serve, and Spirits. However, Malta Guinness remained flat compared to the previous year due to increased pricing in response to higher inflationary pressures on packaging costs.
Additionally, Musunga noted a seven percent increase in marketing expenses, reflecting the company’s heightened investment in marketing to support strategic growth priorities and improve market share. Distribution expenses surged by 28 percent, driven by rising diesel prices, other haulage inputs, and asset replacement costs. Despite these challenges, the company achieved an operating profit of N12.6 billion.
Musunga also pointed out that the continued devaluation of the naira led to a staggering 758 percent increase in net financing costs, primarily due to the revaluation of hard currency debt. However, finance income rose by 121 percent, benefiting from higher yields on short-term cash investments. Dr. Omobola Johnson, Chair of the Board of Guinness Nigeria Plc, expressed confidence in the company’s strategy, stating that it is sound and will continue to drive value for all stakeholders in the long term.
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