Guinness Nigeria Plc released its second-quarter earnings, reporting a pre-tax profit of N20.1 billion for the period ending December 31, 2024. This marks a significant turnaround from the pre-tax loss of N8.2 billion recorded in the same quarter of the previous year. It is also the first quarterly profit posted by Guinness Nigeria Plc since September 2023, when it reported a profit of N3.8 billion in its first quarter.
The profit boost follows the Tolaram Group’s completion of its takeover of operations from Diageo, the former parent owner of the Guinness brand. Tolaram acquired the Guinness Nigeria franchise in June 2024, and within six months, the company achieved its first quarterly operating profit.
The second-quarter profit helped increase half-year pre-tax profits to approximately N4.1 billion, enabling the company to report its first half-year profit since December 2022. The pre-tax profit for FY 2024 stood at N4.1 billion, reflecting a significant recovery from the N4.4 billion loss recorded in the previous half-year.
For the quarter, Guinness Nigeria reported revenue of N133.7 billion, bringing the year-to-date figure to N259.6 billion, an 82.06% increase compared to the full year of 2023.
Key financial highlights for FY 2024 include:
Revenue: N259.6 billion, +82.06% YoY
Cost of sales: N200.5 billion, +107.54% YoY
Gross profit: N59 billion, +28.45% YoY
Other income: N159 million, -93.67% YoY
Marketing and distribution expenses: N31.6 billion, +33.00% YoY
Operating profit: N11.2 billion
Finance expenses: N71.1 billion, +197.75% YoY
Finance income: N63.9 billion, +1993.90% YoY
Pre-tax profit: N4.1 billion
Post-tax loss: N302.7 million
- Surge in revenue boosts margins
Guinness Nigeria Plc reported revenue of N259.6 billion for FY 2024, reflecting an impressive increase of 82.06% compared to FY 2023. Domestic sales contributed 98.5% of the total revenue, while export sales made up the remaining 1.5%. Despite strong revenue growth, the cost of sales surged by 107.54% year-on-year, rising from N96.6 billion in the previous year to N200.5 billion in 2024. However, the company recorded a gross profit increase of 28.45% year-on-year, reaching N59 billion, compared to N45.9 billion in FY 2023.
Marketing and distribution expenses also rose significantly, climbing by 33.00% to N31.6 billion from N23.7 billion in the prior year. Despite rising operational expenses, operating profit declined to N11.2 billion, down from N16.3 billion reported in the previous year. Analysts at Nairametrics observed that the primary driver of Guinness Nigeria’s profitability was a surge in topline revenue, which hit a record N133.7 billion this quarter—the highest ever recorded by the company. The revenue increase helped offset cost pressures, resulting in an operating profit of N18.1 billion.
Guinness reported an operating loss of N6.8 billion at the end of September 2024, the first quarter of the current financial year. Operating profit margins rebounded to 13.2%, the highest since March 2022, when margins were around 18.5%.
Meanwhile, net finance charges, which had been a major contributor to losses in recent years, turned into a net gain this quarter. Although finance expenses more than doubled to N59.5 billion in the quarter under review, this was offset by a surge in finance income totaling N63.9 billion. This turnaround was primarily driven by gains from the remeasurement of foreign currency balances, which accounted for 99.51% of the finance income.
This improvement in profitability is seen as a significant boost for the new owners of Guinness Nigeria Plc as they work to revitalize one of Nigeria’s largest brewers. Tolaram Group, which acquired Guinness in June 2024, reported its first operating profit for the company in less than six months under its management. According to Nairametrics, Guinness Nigeria is likely to be delisted from the Nigerian Exchange as the new owners proceed with a mandatory takeover of the company’s shares from minority shareholders.
Credit: Nairametrics