Guinness Nigeria Plc, the country’s second-biggest brewer in the country, has posted its first loss in at least 30 years as a downturn in the economy increased costs and cut demand for its brands.
The local unit of Diageo Plc posted a loss of N2bn ($6.4m) for the 12 months through June compared with a profit of N7.8bn a year earlier, it said in an e-mailed statement on Tuesday.
Revenue dropped 14 per cent to N102bn due to the “effect of foreign-exchange policy and the devaluation of the naira’’ and a weak economy, Chief Executive Officer, Peter Ndegwa, said in the statement. Operating profit plunged to N4.4bn from N15.7bn, Bloomberg reported.
The currency has lost almost 40 per cent of its value against the dollar since June when the Central Bank of Nigeria removed the peg of 197-199 naira per dollar after more than a year. That increased price pressures in the nation that imports goods from fuel to industrial inputs.
Gross domestic product contracted by 2.1 per cent in the three months through June from a year earlier, while inflation accelerated to 17.1 per cent in July, the highest rate since October 2005.
The economy is on track to shrink 1.8 per cent this year, according to the International Monetary Fund.
Guinness plans to invest 12 million pounds (N15.6m) in a plant in Benin City, in the south of the country as it seeks to cut costs, while it will consider selling Guinness stout and the herbal drink Orijin in South Africa to attract foreign exchange, Ndegwa said in a September 9 interview.
The company’s shares closed at N100 on the Nigerian Stock Exchange in Lagos on Tuesday with the stock is down by 17 per cent year-on-year, compared with a 5.4 per cent gain by Nigerian Breweries Plc, the biggest beer maker controlled by Heineken NV.
The Nigerian Stock Exchange All Share Index has retreated 1.5 per cent this year.
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