GUINNESS NIGERIA PLC - Q3 sales hit 8 year low
​GUINNESS reported a sharp 33% y/y revenue decline for its Q3’16 period ended 31 March 2016 as sales fell to the lowest seen since the first quarter of 2008. This result is a stark contrast to rival NB which reported a 4% volume growth over the same period. Two things quickly come to mind here. First, it could be that the tight FX market-related issues affected volume output (production constraint). Secondly, volumes from Orijin could have remained weak (soft demand). Given the volume weakness, we do not imagine GUINNESS followed the lead of rival NB and passed on some of the increase in input cost (FX related) to consumers. Thus, we suspect the margin improvement in Q3 (44.8% vs 43.0% in Q2) could have come from a product mix more in favour of premium products such as Guinness and Malta Guinness.
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