GUINNESS Nigeria Plc, a consumer goods manufacturing firm, has reported a loss of N18.17 billion for the year ended June 30, 2023.

The company’s audited financial statements released to the investing public on Thursday, July 27, showed that Guinness Nigeria reported loss in June 2023 as against the N15.65 billion profit it recognised in the same period last year.

Checks by The ICIR on the company’s financial statements showed it posted a loss after tax of N18.17 billion in June 2023, arising from high cost of borrowings, which impacted its performance.

It revealed that the company reported a huge finance cost of N53,29 billion in June 2023, compared to N2.13 billion in the same period of 2022. This means that Guinness Nigeria’s finance costs increased by over 2,401.62 per cent.

Finance cost refers to interest cost, borrowing cost or interest expense on short-term borrowings. It is the interest paid on loans, bank overdraft, mortgage loans and other borrowings.

A breakdown of the finance cost indicated that Guinness Nigeria’s finance expense on loans and borrowings rose to N1.69 billion in June 2023, from N688.07 million in June 2022.

Similarly, the sum of N2.31 billion was accrued as finance expense on loans and borrowings during its operations for the year ended June 30, 2023.

Interest expense on lease liabilities rose to N21.61 million from N3,48 million, while interest expense on employee benefits increased to N174.47 million, compare to N155.15 million.

A further breakdown of the cost of borrowings indicated that exchange difference on foreign currency letter of credits rose N19.60 billion, from N71.13 million.

While the company paid N8.05 billion on exchange difference on foreign currency intercompany loan, from N197.44 million, its loss on re-measurement of other foreign currency balances rose to N21.44 billion in June 2023, from N1.16 billion in June 2022.

Although the company reported an increase in revenue of N229.44 billion from N206.82 billion, however, a N151.31 billion cost of sales brought its gross profit to N78.13 billion.

Further deductions from marketing and administrative expense with N73.52 million impairment loss on property, plant and equipment, reduced the company’s operating profit to N23.36 billion.

It should be noted that Guinness Nigeria, a company manufacturing beverages – brewers/distillers – reported an operating loss of N45.496 billion in June 2023, from N225.899 million in the corresponding period of 2022.

According to the company, over 99 per cent of its revenue was earned from sales in Nigeria with very little exported out of the country.

“All of the company’s revenue is derived from sale of similar products with similar risks and returns.

“Additionally, there is no identifiable component of the business with up to 10 per cent of the total revenue, the absolute measure of profit, or loss and its assets,” it stated.

Its revenue from Nigeria rose to N227.35 billion in June 2023, from N204.87 billion in June 2022.