Guinness Nigeria Plc has reported a pre-tax loss of N73.6 billion for the financial year ending June 30, 2024, mainly due to forex devaluation.
The company’s full-year earnings reveal continued losses into the fourth quarter, largely driven by forex depreciation on foreign currency loans. Guinness Nigeria’s financial year ends every June 30.
Diageo Plc, the parent company, recently sold its majority stake in Guinness Nigeria to Tolaram Plc.
The N73.6 billion pre-tax loss for FY 2024 marks a 233% decline from the N22.1 billion pre-tax loss in the previous year. However, revenue rose by 30.5% to N299.5 billion, up from N229.4 billion in FY 2023.
The financial statement indicates a total FX revaluation loss of N112.3 billion, up 129% from the N49.1 billion loss in FY 2023.
Key Highlights FY 2024 vs FY 2023
- Revenue: N299.5 billion, +30% YoY
- Cost of sales: N208 billion, +37% YoY
- Gross profit: N91.5 billion, +17% YoY
- Marketing and distribution expenses: N49.7 billion, +20% YoY
- Operating profit: N25.4 billion, +9% YoY
- Net finance costs: N99.1 billion, +118% YoY
- Loss before income tax: -N73.7 billion, -233% YoY
- Loss for the year: -N54.8 billion, -201% YoY
- Total assets: N226.1 billion, -6% YoY
- Cash generated from operating activities: N100.4 billion, +75% YoY
During the financial year, raw materials costs increased to N149 billion, a 40% rise from N106.6 billion in 2023. The net expected credit loss of trade receivables was about N12.1 billion, a 21% increase from N10 billion the previous year.
Relationship with Diageo International
The company has an outstanding $22.5 million loan to Diageo Plc. At the end of June 30, 2023, this loan’s face value was N17.9 billion. By the end of FY 2024, the loan’s face value rose to N39.3 billion.
A review of loans and borrowings shows letters of credit liabilities of about N814 million to five banks at the end of FY 2024, down from N45.8 billion the previous year. This decline reflects a strategy by Nigerian subsidiaries of foreign-based companies to mitigate the impact of scarce FX on their balance sheets by increasing intercompany liabilities for raw materials or foreign exchange, as these loans had more favourable conditions than regular bank credits.
Guinness Nigeria’s relationship with Diageo International is changing as the group has sold its majority stake to Tolaram.
