SERIOUSLY battling shrinking sales and declining profits in a discouraging business climate, Guinness Nigeria Plc is not having a smooth ride these turbulent times, though the management of Nigeria’s premier brewery is painting rosy picture of its financials.
Guinness Nigeria Plc, a subsidiary of Diageo Plc, announced its quarterly results for the nine months period ended 31 March 2015, claiming it posted 47 per cent growth in operating profit. The announcement which was made to the Nigerian Stock Exchange, also revealed a 17 per cent increase in net sales for the quarter year on year when compared to the same period last year.
John O’Keeffe, the former Managing Director/Chief Executive Officer, Guinness Nigeria Plc said: “We recorded a strong performance in the quarter driven by the continued success of Orijin and our participation in the value segment of the market through Satzenbrau along with the improving performance of Guinness stout. As a result, we are reporting a double digit net sales growth in the period.”
He, however, admitted that high finance costs in a high interest rate environment negatively impacted overall profitability of the company.
“We will continue to invest in our brands and enhancing our route to consumer. We expect the ongoing currency devaluation to lead to increasing cost pressure and softening consumer demand. In addition, the one-off tax credits in the prior year will not recur.”
But ENCOMIUM Weekly’s investigation reveals that Guinness’ didn’t post encouraging results in its current Statement of Financial Position that ended March 31, 2015.
In fact, its Profit/Loss Before Tax is down by 5,216,379 when compared with 5,943,271 previously recorded by the company. Profit/Loss Before Tax actually declined by 12%.
Also negatively affected was its Basic Earning Per Share which dropped to 346 as against 395 in 2014. Guinness cost of sales equally upped. It increased from 26,234,271 to 29,695,073. And that’s by 13 per cent.
The unedited results for the nine months period ended March 31, 2015 was, however, silent on other comprehensive income that accrued to Guinness though other income suffered a downward turn. Records showed it was 574,887 in 2014, while it’s now 560,174.
The 2013 and 2014 business year was also a difficult time for Guinness, with just N1,913,940,000, Profit for the year. This was against the not- so- impressive profit of N3,254,041,000 as at December 31, 2013. The figures before tax deductions stood at N4,996,890,000 and N3,398,591,000 respectively for 2013 and 2014.
And because of these challenges, Guinness Nigeria Plc has been tinkering with its management structure. A development that has seen it appoint three MDs in just eight months!
GUINNESS NIGERIA PLC FIRST FIRED SENI ADETU
Guinness Nigeria Plc relieved Mr. Seni Adetu as its Managing Director and appointed Mr John O’Keefe, an Irish, to take over from him. It was alleged that Guinness Nigeria Plc results had been poor since Adetu became Managing Director, posting weaker margins year after year and losing market share in its wake. The company share price had also lost significant value dropping from about N290 a year ago to about N175 the month he was given the boot.
Guinness Nigeria Plc had notified the Nigerian Stock Exchange that Mr. Seni Adetu would be stepping down as the company’s Managing Director/Chief Executive Officer in November 2014, after two and half-years in that position.
“Prior to taking up this assignment, Mr. Adetu was the Managing Director of Guinness Ghana Breweries Ltd; and East African Breweries Ltd., where he achieved great success. Having completed his assignment, he will report to Nick Blazquez, President, Diageo Africa and Asia starting January 2015,” it said in a statement.
JOHN O’KEFEE BOWS OUT
Guinness also recently announced a change in the leadership of the company with the exit of the Managing Director/Chief Executive Officer, Mr. John O’Keeffe who was promoted to take the role as President, Diageo Africa. His successor, Mr. Soren Lauridsen assumed office last week, according to the company.
ABOUT THE NEW GUINNESS MD, SOREN LAURIDSEN
Soren Lauridsen joined Diageo from Carlsberg with a considerable experience in the beer category and knowledge of emerging markets. During his 10-year career at Carlsberg, Lauridsen held senior leadership roles including Regional CEO of South Asia, based in Bangkok, and Managing Director for Carlsberg, India. He also has leadership experience of working for Carlsberg in Lagos and Poland. Prior to working at Carlsberg, he worked as Category Director for Orkla Foods covering Nordics and Eastern Europe for three years and held several leadership positions in Unilever Foods for 13 years.
His appointment as MD, in the words of Babatunde Savage, Chairman, Guinness Nigeria Plc, is expected to improve the companies fortunes.
“We have had an encouraging year so far and we believe that we are in a position to finish the year well in spite of the challenges of the operating environment. Recent changes in our management with the arrival of Soren will only further strengthen the pool of seasoned experience we have to help us implement our strategy to win in the market place.”