Economic crisis: Guinness profit down by 83%

Guinness Nigeria Plc says its nine-month profit has fallen by 83 percent from N5.2 billion in March 2015 to N864 million in March 2016.

Nigeria’s second-largest brewer also experienced a revenue drop of 18 percent from N84.75 billion to N69.6 billion.

Just after the announcement of the three-quarter results, Guinness Nigeria shares fell by N1.84 to close business on Friday at N98, hitting its lowest point in a month.

Though the company did not explain the reasons for the crash in profit, the results show that there was a drastic drop in sales from N45 billion in 2015 to N39 billion in 2016.

The results also revealed that the crash in the company’s profit also means a drastic drop in government revenue in taxes from the brewing giant.

The results show that taxes paid in the time under review fell from N1,92 billion in 2015 to N340 million in 2016, resulting in an appreciable drop in revenue for government.

All these is happening at a time when the Nigerian government is seeking all viable means of increasing revenue and reducing cost of governance, due to a crash in crude oil prices from over $100 to $40 per barrel.

Since the crude crash started about 18 months ago, many companies in the Nigerian market have been adversely hit, following exchange rate risks on the weakening naira.

For Guinness, its share price has plunged 42 percent since the start of 2015, while Nigerian Breweries Plc, the biggest player in the market, has also fallen by 36 percent.