Guinness Nigeria Plc recorded a N5.23bn loss after tax in 2023 after its cost of borrowing from lenders to finance its activities and foreign exchange losses more than doubled during the year.
The company is known for its famous brands like Harp, Guinness, Johnnie Walker, Baileys, Smirnoff, Gordon’s Dry Gin, Satzenbrau, Dubic Malt, Malta Guinness and Orijin.
Guinness Plc’s financial statement which was analysed by THE WHISTLER revealed that the company ran at a loss despite growing its revenue by 20.3 per cent from N118.45bn in 2022 to N142.59bn by the end of 2023.
Advertisement
The company posted N4.02bn profit after tax in 2022, but it became a loss-making company after it spent N23.88bn as finance expenses, an amount which rose by 256.4 per cent from the N6.7bn incurred in 2022.
The books showed that in the fourth quarter of 2023, Guinness declared N7.8bn loss after tax.
A breakdown of the finance cost for the full year showed that the loss on remeasurement of foreign currency balance was N17.27bn, up from N2.77bn in 2022, while exchange difference on foreign currency loan rose to N3.66bn from the N1bn difference in 2022.
Interest expenses on loans were N777.8m in 2023 up from the N400.5m recorded in 2022, while accrued interest rose to N1.47bn compared to the N427.9bn recorded in 2022.
Another factor that drove the loss was the cost of sales, which rose from N76.1bn in 2022 to N96.65bn in 2023, the company’s books reveal.
The Central Bank of Nigeria in June 2023 reintroduced the ‘Willing Buyer, Willing Seller’ model in the foreign exchange market and a managed float of the naira which crashed the currency to around N670 and nearly over N800 per dollar by the end of 2023.
The policy which was aimed at sanitising the foreign exchange market and boosting investors’ confidence in the Nigerian market led to huge FX losses for companies operating in the country.