Guinness Nigeria profit drops by 83% as low consumer spending hit sales

Low consumer spending in Nigeria as the country faces its worst economic crisis for years is affecting the alcoholic beverage industry in the country. Guinness Nigeria Plc lost 18 percent of sales revenue on year-on-year basis at the end of the third quarter ended March 2016.

“Third quarter sales were impacted by a tough operating environment and the lapping of a very strong quarter in the previous year – particularly with distribution gains for the Orijin brand. The economic slowdown and rise in inflation continue to cause a shift towards lower margin value products,” said Peter Ndegwa, the company’s Managing Director/Chief Executive Officer.

However, Mr Ndegwa said the company had started making progress in the broadening of its portfolio and is also seeing resilience in its core brands. “We are also focused on driving efficiency throughout our operations to address the continuing pressure on margins.”

Net revenue fell to N70 billion for the 9 months period ended 31st March 2016 from N85 billion the previous year. Profit after tax also fell by 83.4 percent to N864 million from N5.2 billion in 2015.

“We anticipate that the year will be challenging as we incur one-off costs to reshape our business and continue to broaden our portfolio in order to drive future growth,” Ndegwa said.