Guinness Plc In Biggest Debt Crisis, Loses N17bn |The Source

By Fola James

Guinness Nigeria Plc, Nigeria’s leading brewer is facing a big debt crisis that is capable of crippling its operation.

The British firm has struggled in the last one year due to the country’s economic crisis that has hit businesses but the debt problem could hamper growth, according to analysts.

The beer making giant is currently in debt to the tune of N27 billion to various creditors but has faced difficulty in servicing the loans, due to acute dollar scarcity in the country, according to Stanley Njoroge, the company’s Finance and Strategy Director, who said the situation is really frustrating for the multinational.

Njoroge said in Lagos recently that “We want to refinance” our debt ‘but there is currently no foreign currency in the market. Foreign exchange is a big concern for us.”

The situation is not funny at all, for the second biggest brewer in Nigeria which has faced declining revenue and profitability in the last one year, analysts say.

The details of the financials released to the Nigerian Stock Exchange, NSE five months ago had somehow prepared stakeholders and investors for what’s to be expected from the Brewer.

For instance, the firm had reported in March that its nine month profit after tax stood at N1.672 billion, a plunge of 60 per cent from N4.252 billion recorded in 2019.

Revenue within the same period also stood at N96.08 billion for the nine months, a fall of 5.3 per cent compared with N101.40 billion recorded in the corresponding year of 2019.

While declaring its annual report which ended in June, the company said it has incurred an annual pre-tax loss of N17.07 billion.

What this means, is that shareholders will not be paid dividends for the last financial year, analysts say, adding that incidences of job loses cannot be totally ruled out.

Guinness has blamed the misfortunes on COVID-19 which disrupted its operations.

Meanwhile, watchers of the company say the nation’s economic problem, combined with the federal government policy on excise duty have greatly hampered the company’s fortunes.

The Buhari administration has increased excise duties on beer and stout by 30 kobo per centiliter in 2018, which it further increased to 35 kobo in 2019.