Shareholders of Guinness Nigeria Plc may not get any cash reward for the 2020 financial year ended June 30 because the company board did not recommend any dividend payment for approval at the forthcoming Annual General Meeting (AGM) unlike in the previous years.
The reason for this action may not be far-fetched as the brewery giant had a bad fiscal year because the key performance indicators were not impressive.
In the 2019 accounting year, the board proposed a final dividend of N1.52 each and in the 2018 fiscal year, N1.80 was paid as a cash reward to the firm’s investors. However, in the just-concluded accounting year, no dividend was recommended by the board of directors.
During the year, the company’s revenue depreciated by 21 per cent to N104.4 billion from N131.5 billion in 2019 and this was significantly due to decline in the sale of the company’s products in the local market, Nigeria. Also, revenue from export was largely impacted in the period under review.
It is important to note that in the fourth quarter of the company’s financial year, its core markets; bars, restaurants, hotels, event centres and others were shut down by the federal government because of the COVID-19 pandemic. This may have largely contributed to the huge decline in the revenue generated.
In the results, the firm said its cost of sales reduced to N71.1 billion from N91.4 billion, while the gross profit dropped to N33.3 billion from N40.1 billion.
Also, other income decreased to N503.0 million from N781.5 million, while marketing and distribution expenses were pruned to N18.5 billion from N21.8 billion, with administrative costs rising to N14.3 billion from N9.9 billion.
In the year, Guinness Nigeria recorded an operating loss of 234 per cent, N12.8 billion, compared with the operating profit of N9.0 billion in the 2019 fiscal year, while the finance income reduced to N301.0 million from N750.9 million, with the finance costs jumping to N4.5 billion from N2.6 billion.
While the company had a loss before tax of N17.1 billion versus the pre-tax profit of N7.1 billion a year earlier, it printed a post-tax loss of N12.6 billion compared with the post-tax profit of N5.5 billion in FY’19, indicating a decline by 329 per cent, with the earnings per share at -N5.74 in contrast to N2.50 in 2019.
In the financial statements, Guinness Nigeria said during the initial phase of the lockdown imposed by the federal government, it obtained authorisation “from relevant government agencies to allow the continuation of trading activities, where possible.”
It further said following the easing of the lockdown, “our Benin site has been partially reopened to allow for the running of our spirit line and packaging line within the site.”
“Regarding our Ogba site, the Brew House team has returned to work as well. Within both sites, we continue to strictly control the number of persons on-site in order to ensure adherence to social distancing guidelines and the necessary PPEs (hand sanitizers, gloves, wipes, masks as required) have been provided to all employees.
“Transportation arrangements have also been made for essential employees required on-site and temperature checks continue to be observed before site access is granted to any employee,” it added.
