Guinness Nigeria issues revenue warning amid surging COVID-19 crisis

Guinness Nigeria issues revenue warning amid surging COVID-19 crisis

NIGERIA – Diageo-owned Guinness Nigeria Plc has issued a revenue warning ahead of the release of its full year audited financial result for the period ended 30th June.

The announcement comes even as its sister company, East African Breweries Limited (EABL) recently announced plans to acquire an additional 30% stake in Tanzania’s Serengeti Breweries Limited (SBL).

According to Guinness Nigeria, the adverse impact of the sharp contraction in economic activities and the knock-on effect of the COVID-19 lockdown took a toll on the on-trade segment of its business across all markets with production and revenues being negatively affected.

Guinness Nigeria further revealed that it carried out a comprehensive review of its asset base and made a strategic decision to impair a certain category of assets.

This assets according to Guinness, were generating suboptimal returns, and their shedding was in line with the company’s long-term strategy of delivering value to shareholders.

“Due to a combination of the impact of COVID-19 and the asset impairment, we expect the profitability of the Company for the Financial Year to 30th June 2020 to be impacted,” a statement from the brewer read in part.

“The Company’s balance sheet however remains strong, and this gives the Board the confidence that the Company has the right resources to continue to deliver the strategy.”

Guinness, market leader in Stout segment reported revenue of N96.08 billion (US$248.1m) in the nine months that ended March 31, 2020, showing a fall of 5.3% compared with N101.40 billion (US$261.9m) recorded in the corresponding year of 2019.

The Guinness brewer also recently sought to raise up to N5 billion (US$12.9m) via Series 1 and Series 2 Commercial Paper (CP) under its N10 billion (US$25.8m) CP programme, to support the company’s short-term funding requirements.

Guinness Nigeria further noted that the audited financial results for the FY2019 as approved by the Board will be published in accordance with extant rules and guidelines after the completion of the year end audit in the month of August 2020.

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