Guinness explains 18 per cent slide in profit

GUINNESS Nigeria Plc has attributed the 18 per cent drop in profit after tax for the financial year ended June 2012 to distribution cost incurred from its N52 bilion capacity expansion investment, as well as the interest charges incurred inform of overdraft from support received from the investment.

The Managing Director of the company, Seni Adetu, while addressing journalists yesterday at a press briefing to announce the forth coming yearly general meeting of the company, explained that the cost incurred during the year from the capacity expansion programme which is expected to reposition the company from low capacity to almost very adequate capacity in the long run with the interest charges from the support the company received from the investment were reasons behind the decline in profit after tax.


He said: “profit after tax decline by 18 per cent but it could have done a lot better if we had capacity in the first half of the year. We normally have our financial year from July to June and in between July and December of our financial year, we have done a lot better, coming into the second half of the year but the economy slowed down during the period.

“In January this year, government announced a withdrawal of fuel subsidy and that negatively impacted on our financial year, again, why we have capacity shortfall in the first half, we were stripping down in few things to continue the N52 billion investment we announced two years ago”.

According him, the capacity project, when completed would enhance efficiency in productivity and increase profitability, which would ultimately improve shareholders’ fortunes.

He also assured stakeholders that the outlook of the company remains positive and strong, adding that with the quality of the brand and the people, as well as its corporate reputation, the company would remain focused and competitive to continue to deliver good returns to shareholders.

“We believe in our business strategy and if we continue to focus on our brand, establish a competitive brand, ensure that we manage our structure very efficiently, put the right channels in place, and a lot of that embedded in right control and compliance to the organization, when we put all of that together, we will position the company to continue to win year in year out.”

The Chairman of the company, Babatunde Savage, who assured that the company was well positioned to get to the highest level even in a harsh operating environment, added that the company would continue to ensure that it maintains its brand quality, as well as invest in capacity building to improve its bottom line.

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