24 October 2019:

Guiness Nigeria hasn’t been able to see the light of the day since the start of the year. Their destruction of volume started in Q1’19, and hasn't seemed to end, as seen in their Q3’19 results posted for the period ending 30 September 2019. They experienced a 3.8% YoY drop in net revenue. With towering operating expenses, the dwindling volumes of the Lager and Ready to Drink ( RTD ) did not help matters. As a result, the Earnings per Share ( EPS ) fell by a whopping 43.5% YoY to N 0.76. 

The astronomically high excise duty just threw fuel to the fire, which was supported by its lower base last year and frail beer volumes.

The decline in cost of sales (-3.2% YoY) was slower than should have been. This can be mainly attributed to the sky-scraping barley prices (+9% YoY) and lower fixed cost absorption rate from loss of volume share.

Gross Profit went down by 5%YoY to N14.2 billion with related margin contracting 40bps to 32.8%

The company also has to experience cost pressure, as OPEX grew by 9% YoY to N8.5 billion over Q3 19, which can be attributed to unnecessarily high administrative and distribution expense.

Consequently, EBIT fell by 33.2% YoY to N2.7 billion while related margin contracting 350bps to 8%.

To make matters worse, their interest expense rose by 39% YoY to N280 million.Unsurprisingly, their PBT and PAT fell 43.5% YoY apiece to N2.5 billion and N1.7 billion respectively.

Reporting for EasyKobo on Thursday , 24 October 2019 in Lagos, Nigeria