Guinness Nigeria Plc, the West African nation’s second-largest brewer, said full-year profit declined as drinkers in Africa’s biggest economy switched to cheaper brands.
Net income for the 12 months through June fell 19 percent to 9.5 billion naira ($58.5 million), the unit of London-based Diageo Plc said today in a filing to the Nigerian Stock Exchange. Revenue retreated 11 percent to 109.2 billion naira.
“Nigerian drinkers are cutting down on premium beer” such as Guinness after a rise in fuel prices put pressure on disposable household income, Adewale Okunrinboye, an analyst at Lagos-based Asset & Resource Management Co., said by phone. “The company’s premium strategy is affecting its sales, while higher finance charges and operating costs on the route to market is cutting profit.”
The brewer started to sell Dubic lager, which costs less than the company’s flagship Guinness stout, to improve sales in Africa’s most populous nation, Chief Executive Officer Seni Adetu told Bloomberg TV Africa in May. A wave of deadly bomb attacks and kidnappings by the Islamist militant group Boko Haram in the northeast of the country and Abuja, the capital, is also contributing to lower beer sales, he said.
The stock fell 2.9 percent, the most since August 11, to 175.80 naira at the close of trading in Lagos. It has declined almost 26 percent this year, compared with a 0.3 percent retreat in the Nigerian Stock Exchange All-Share Index.
via@Bloomberg