Guinness Nigeria Plc reported a significant pre-tax loss of N16.03 billion in the first quarter of the 2024/2025 financial year, spanning July to September 2024. This financial setback has been attributed to multiple rising costs, even as the company’s revenue more than doubled.
The unaudited results revealed a jump in revenue from N59.53 billion to N125.88 billion, a 111% increase, yet the company still reported a loss due to escalating expenses.
The quarterly report highlighted several key financial points, marking a reversal from an operating profit in early 2024 to an operating loss in this period. Increased expenditures were noted across finance costs, marketing, distribution, and administrative expenses, while other income dropped.
This financial strain reflects the broader economic challenges currently affecting Nigerian consumers, as rising costs impact companies in various sectors.
Key Financial Highlights of Q1 2024/2025:
Revenue: N125.88 billion (+111%)
Cost of Sales: N111.62 billion (+170%)
Gross Profit: N14.25 billion (-21.4%)
Marketing and Distribution Expenses: N13.3 billion (+60%)
Administrative Expenses: N7.88 billion (+57.6%)
Operating Loss: N6.86 billion (-187%)
Finance Income: N2.44 billion (+120%)
Finance Cost: N11.60 billion (+151%)
Net Finance Cost: N9.16 billion (+126%)
Pre-tax Loss: N16.03 billion (-520%)
After-tax Loss: N12.16 billion (-569%)
Basic Earnings Per Share (EPS): -N555 (-566%)
These losses come on the heels of Guinness Nigeria’s challenging financial year ending June 30, 2024, during which the company reported a pre-tax loss of N73.6 billion.
A major contributor to these annual losses was a foreign exchange revaluation loss of N112.3 billion, marking a 129% increase from the previous year’s N49.1 billion loss.
This quarter’s financial performance was further impacted by a substantial rise in cost of sales, which outpaced revenue growth, causing a drop in gross profit from N18.13 billion to N14.25 billion.
Finance costs also saw a sharp increase, rising to N11.6 billion, which weighed heavily on the company’s bottom line.
This increase in financial costs is partly attributed to a $22.5 million loan from Diageo Plc, Guinness Nigeria’s previous parent company.
In June 2024, Tolaram Group acquired a 58.02% stake in Guinness Nigeria from Diageo, signaling Diageo’s exit from the Nigerian market.
At the time of the acquisition, Guinness Nigeria’s market capitalization was estimated at N110.7 billion, with shares trading at N50.5, indicating the transaction’s potential value at over N64 billion.
The company’s current financial challenges underscore the high costs of operations amid Nigeria’s economic difficulties, with Guinness Nigeria’s expenses, particularly in sales, finance, and administration, outpacing revenue gains.
