GUINNESS Nigeria Plc said its first-half (H1) pretax profit for the period ended December 31, 2015 dropped 65 percent to N1.652 billion from N4.658 billion recorded a year ago.
Similarly, post-tax profit declined 66 percent to N1.172 billion from N3.398 billion posted the same period 2014.
Revenue of the beer maker depreciated from N55.267 billion in the H1 period of 2014 to N49.863 billion in the review period of 2015; showing a decline of 10 percent, according to Guinness Nigeria in a filing with the Nigerian Stock Exchange, NSE.
Shares of the company at the close of last trading on the Nigerian bourse increased 5.0 percent to N115.50 per share from N110.00 per share traded the previous session.
Commenting on the results, Mr. Peter Ndegwa, the company’s Managing Director and Chief Executive Officer, stated: “Sales revenue came under pressure, declining by 9.8%, as the operating environment weakened further. The contraction in economic activities during the period negatively affected our business.
“A significant erosion of consumer disposable income and consequent down-trading by price sensitive consumers took its toll on the industry and affected top line growth.
“In spite of the deterioration in the economy, our premium core brands showed recovery and resilience during the period with Guinness Foreign Extra Stout and Malta Guinness recording double digit shipment growth reflecting momentum against a weak period.
“Satzenbrau also performed strongly during the period with half year net sales growth of 54% as the brand builds its position in the growing value beer segment.
“However, this was not sufficient to impact the operating profit, which declined by 51.6% during the period.
“We have maintained our marketing investments despite these headwinds as we launched the first Guinness stout innovation in ten years with Guinness Africa Special just before Christmas and leveraged our ‘Every Minute Made of Black’ National Consumer Promotion campaign to drive consumer affinity for the brand.
“In the second half, we expect to see some improvement in sales with innovation and the distribution of Diageo’s international premium and mainstream spirits brands which have been integrated into our business, although the set up costs mean that the operating margin is not expected to benefit until the next financial year.
However, this is subject to an improvement in the trading environment which remains volatile with speculation of possible currency devaluation, non-availability of foreign exchange even for eligible transactions and inflationary pressure.”