Guinness Nigeria Plc Monday
announced its results for the nine months ended March 31, 2014, showing a
decline of 30 per cent profit before tax. Analysts said with the decline in
bottom-line for the nine months, shareholders should expect a likely slash in
dividend at the end of the financial year (June 30, 2014).
According to the results made available at the stock market yesterday,
the brewing firm recorded revenue of N78.08 billion, down by 11 per cent from
N88 billion recorded in the corresponding period of 2013.
The company strived and reduced cost of sales by 13 per cent from N48
billion to N41.6 billion. Finance charges also grew marginally by three per
cent from N2.528 billion to N2.596 billion. In spite of those cost
curtailing efforts, profit before tax fell by 30 per cent from N11.234
billion to N7.823 billion.
Guinness also reduced its taxation by 48 per cent, from N3.6 billion in
2013 to N1.88 billion in 2014. Hence, profit after tax witnessed a decline of
22 per cent from N7.633 billion to N5.943 billion. The market reacted
negatively to the results leading to a decline of 5.9 per cent in its share
price from N190 to close lower at N185.51 per share.
Guinness had similarly recorded a fall of 32 per cent in profit after
tax for the six months ended December 31, 2013. Explaining the half
year profit decline, Managing Director of Guinness Nigeria Plc, Mr. Seni Adetu
attributed it to three major factors.
He listed down trading in the company’s value brand due to the
discretionary income of consumers that was affected especially in the
first quarter of that half year. Adetu also cited the
aggressiveness with which the company priced its products as
another reason.
The third factor, according to him, was the inability of the company to
convert some of the opportunities they have around its
retail consumers to real outcome.
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