, Magazine

Guinness Nigeria Plc today ended today’s trading session at a five year low for the second day in a row. The stock closed at N54 and traded a total of 314,384 units.  

Year to date, the stock is down 25% underperforming the Nigerian Stock Exchange All-Share Index which is down 4.87% 

The sector has lagged  

The stock is not the only one with a disappointing year to date performance. Nigerian Breweries is down 25.1%. International Breweries is down 31.1%. Fringe operator Champion Breweries has also done poorly, declining by 33.7% year to date.  

A combination of consumer preference for value beers, a spike in excise duties, and a middling macroeconomic environment have left brewers struggling.

Intense competition between the big three (Nigerian Breweries, International Breweries, and Guinness Nigeria) have left them unable to pass the costs to their customers.

Nigerian Breweries profit after tax for the first quarter ended March 2019 shows a 21.5% decline in profit after tax.

How low will it go? 

Possibilities of the stock dipping further are fairly high. In yesterday’s trading session, the stock dipped below the N50 mark but closed at N54 because it did not move the required volume to effect a price change.  

Quarterly results for the first three calendar months of the year typically tend to be poor for brewers.

Q1 2019 results released by its peer Nigerian Breweries show a slight increase in revenue but drop in the bottom line. Guinness Nigeria results are unlikely to show any significant upside, especially in terms of the bottom line.

HY 2018/2019 results were up largely due to a decline in finance costs and marketing expenses. 

About the Guinness Nigeria  

Guinness Nigeria was incorporated in Nigeria on April 29th, 1950 as a trading company importing Guinness Stout from Dublin, Ireland. 

The company manufactures a  wide range of alcoholic and non-alcoholic beverages from breweries in Ikeja (Lagos State) and Benin City (Edo State). Guinness Nigeria Plc was listed on the Nigerian Stock Exchange on January 2nd, 1965.