Guinness Nigeria Plc has reported a pre-tax profit of N20.1 billion for the second quarter ending December 31, 2024. This marks a significant turnaround from the N8.2 billion loss recorded in the same period the previous year.
The latest financial results represent the company’s first quarterly profit since September 2023, when it posted earnings of N3.8 billion in its first quarter.
Tolaram’s Impact on Financial Performance
The impressive performance follows the acquisition of Guinness Nigeria by Tolaram Group, which took over operations from Diageo in June 2024. Within just six months of the transition, the company has recorded its first operating profit under the new management.
The strong second-quarter results have also contributed to a half-year pre-tax profit of N4.1 billion, marking the first positive half-year result since December 2022. This is a notable improvement from the N4.4 billion loss posted in the previous half-year period.
Revenue Growth and Key Financial Metrics
Guinness Nigeria’s revenue for the quarter reached N133.7 billion, pushing the year-to-date figure to N259.6 billion—an 82.06% increase compared to the full year of 2023. Despite the revenue growth, rising costs continue to exert pressure on the company’s bottom line.
Key highlights from the financial report include:
- Revenue: N259.6 billion, up 82.06% year-on-year
- Cost of Sales: N200.5 billion, an increase of 107.54%
- Gross Profit: N59 billion, up 28.45%
- Other Income: N159 million, a decrease of 93.67%
- Marketing and Distribution Expenses: N31.6 billion, up 33%
- Operating Profit: N11.2 billion
- Finance Expenses: N71.1 billion, up 197.75%
- Finance Income: N63.9 billion, a remarkable rise of 1993.90%
- Pre-tax Profit: N4.1 billion
- Post-tax Loss: N302.7 million
Revenue Surge and Cost Management
The report indicates that domestic sales accounted for 98.5% of total revenue, with export sales making up the remaining 1.5%. Despite the impressive revenue growth, the cost of sales saw a significant rise, climbing from N96.6 billion in the previous year to N200.5 billion in 2024.
Gross profit for the period increased by 28.45% year-on-year to N59 billion, compared to N45.9 billion in FY 2023. However, operating expenses also increased, impacting the company’s profitability.
Profitability Drivers and Financial Gains
Analysts attribute the company’s return to profitability primarily to a substantial increase in revenue, which hit a record N133.7 billion in the quarter—the highest in the company’s history. This revenue boost helped offset rising costs, delivering an operating profit of N18.1 billion.
Guinness Nigeria had reported an operating loss of N6.8 billion in the first quarter of the financial year. However, operating profit margins rebounded to 13.2%, the highest since March 2022.
Finance-related improvements also played a crucial role in the company’s performance. While finance expenses more than doubled to N59.5 billion, they were offset by finance income surging to N63.9 billion, primarily driven by foreign exchange gains.
Future Outlook Under Tolaram’s Leadership
The positive results under Tolaram’s management mark a significant step forward for Guinness Nigeria as it navigates the challenges of Nigeria’s economic environment. The acquisition has brought renewed optimism for the company, which had struggled in recent years.
Reports suggest that the new owners may consider delisting Guinness Nigeria from the Nigerian Exchange as they proceed with a mandatory takeover of shares from minority shareholders.
This financial turnaround is expected to bolster confidence in Guinness Nigeria’s long-term prospects under Tolaram Group’s leadership.
