One of Nigerian leading brewing giant, Guinness Nigeria Plc has assures investors that there are many bright spots for the company despite the current challenges that is facing the company. Mr Peter Ndegwa Managing Director of the company disclosed this today in a statement made available to Financial Edge in Lagos.
Ndegwa who was commenting on the company unaudited half year financial statement for the period ended December 31, 2016, explained that the challenging economic environment and high finance charges impacted negatively on the company second quarter result.
According to him, the unrealized foreign exchange losses during the half year meant that our net finance cost grew by 166 percent. As a result of the high input costs and the foreign exchange impact on financing costs, we recorded a Loss before Tax of N4.6 billion.
Guinness Nigeria boss is optimistic that with the different range of products in the company basket, the company should be able to navigate through its challenges. In his words 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 Mr. Babatunde Savage, Chairman of the company noted that 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.
Highlight of the unaudited account for the half year shows that the company grew its revenue by 19 percent from N49,836 billion in 2015 to N59,490 billion in the period under consideration. Loss before tax stood at N4.662 billion against N1.652 billion profit before tax that was recorded same period in 2015. Loss for the period stood at N4.667 billion against N1.172 billion profit after tax that was posted same period in 2015. Earnings per share stood at negative 310 against 78 kobo in 2015.
It would be recalled that on Tuesday January 24, 2017, the company, a member of the global drinks group, Diageo Plc, held an Extraordinary General Meeting (EGM) of its shareholders where it received approval for a Rights Issue to raise up to N40 billion, which is still subject to the approval of the regulatory authorities.
The approval will set the company on course to raise funds it hopes to use to optimize its balance sheet and 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 and Smirnoff X1.
Earlier in 2016, the company also acquired the distribution rights to Diageo international spirits brands like Johnnie Walker, Baileys and Croc. Guinness Nigeria was established in 1960 and has manufacturing facilities in Lagos and Benin.