BREAKING: Guinness Nigeria incurs N49 billion in exchange rate loss

Guinness Nigeria Plc incurred a whopping N49 billion in exchange rate losses according to the information contained in its full-year results for the period ending June 2023.

The loss per share declared was N8.29 kobo versus N7.15 earnings per share a year earlier.

Key highlights

• Revenue for the year was N229.2 billion +10.9% YoY
• Gross profit was N78.1 billion +7.5% YoY
• Operating profit N23.3 billion -2.3%
• Net finance cost N45.4 billion +20040.1%
• Loss after tax N18.1 billion -216.1%
• Loans and advances N63.7 billion vs N31.3 billion YoY
• Cash generated from operations N57.3 billion vs N38.9 billion YoY
• Cash in bank N92.1 billion vs N69.1 billion
• The dividend declared is N15.6 billion compared to N1 billion YoY
• DPS is N7.14 per share +1452%YoY

Insights: The forex depreciation led the company to a loss of N18.1 billion, its first full-year loss since 2020 when Covid-19 ravaged company financials.

• Adjusting for the extraordinary forex loss of N49 billion, the company reported an operating profit of N23.5 billion.
• Thus without the forex charge, Guinness would have reported strong profits.
• Guinness also reported an unrealised exchange rate gain of N5.5 billion on foreign currency balances.
• Guinness has a related party dollar loan of $22.5 million which means the naira equivalent is now N17.9 billion compared to N9.4 billion as of December 2022.
• The company also has letters of credit related loans of about $33.8 million, EUR 18.8 million, and GBP 2.9 million at the end of the year.
• Trade and other payables denominated in forex also amount to $48.1 million, EUR 245, and GBP 5.5 million.
• Guinness still declared massive dividends as the losses will not immediately impact cash balances.