Guinness Nigeria Plc has reported a pre-tax profit of N20.1 billion for the second quarter ending December 31, 2024, marking a significant turnaround from the pre-tax loss of N8.2 billion recorded in the same period the previous year.
This milestone represents the company’s first quarterly profit since September 2023, when it posted N3.8 billion in its first-quarter earnings. The recent profit boost follows Tolaram Group’s acquisition of Guinness Nigeria from Diageo in June 2024, a move that has already begun to yield positive results.
The second-quarter profit contributed to a half-year pre-tax profit of N4.1 billion, marking Guinness Nigeria’s first half-year profit since December 2022. This reflects a substantial improvement from the N4.4 billion loss recorded in the previous half-year period.
Revenue Surge Boosts Margins
Guinness Nigeria Plc recorded revenue of N133.7 billion for the second quarter, bringing the year-to-date revenue to N259.6 billion. This represents an impressive 82.06% increase compared to the full year of 2023.
- Domestic Sales: 98.5% of total revenue
- Export Sales: 1.5% of total revenue
Despite the strong revenue growth, the cost of sales surged by 107.54% year-on-year, rising from N96.6 billion to N200.5 billion. However, the company still recorded a gross profit increase of 28.45%, reaching N59 billion compared to N45.9 billion in FY 2023.
Operating Expenses and Profitability
Marketing and distribution expenses rose by 33%, reaching N31.6 billion from N23.7 billion the previous year. Rising operational expenses led to a decline in operating profit to N11.2 billion, down from N16.3 billion in the prior year. However, the company reported an operating profit of N18.1 billion for the quarter, reversing an operating loss of N6.8 billion in the first quarter of FY 2024.
Operating profit margins rebounded to 13.2%, the highest since March 2022, when they stood at 18.5%.
Finance Income Turns the Tide
A significant factor behind Guinness Nigeria’s turnaround was the swing in finance charges. Although finance expenses more than doubled to N59.5 billion in the quarter, finance income surged to N63.9 billion, primarily driven by gains from the remeasurement of foreign currency balances, which accounted for 99.51% of finance income.
This positive development has bolstered confidence in Tolaram Group’s management, as the company navigates Nigeria’s challenging economic landscape and works to revitalize one of the country’s largest breweries.
Future Outlook
The recent financial resurgence is expected to provide a significant boost to Guinness Nigeria under Tolaram’s leadership. While speculation has surrounded a potential delisting from the Nigerian Exchange (NGX) following the mandatory takeover of shares from minority shareholders, sources within the company confirm there are no current plans to delist.
As Guinness Nigeria continues to build on its growth trajectory, stakeholders remain optimistic about the company’s long-term prospects under its new ownership.
