Culled–Proshare

October 31, 2016/CardinalStone Research

Guinness Nigeria Plc Q1’17 results – Turnover for Q1’17 increased by 5.9% YoY to N23.0 billion in line with our estimate of a 4.6% YoY growth to N22.0 billion.

Gross profit margin however declined markedly to 28.6% from 42.9% in Q1’16, following the sustained weakness of the currency and the impact of rising local inflation on cost of sales.

Added to this, net financial charges rose by 211.7% to N2.9 billion weighed down primarily by foreign exchange losses on the company’s foreign currency denominated loans to the tune of N2.2 billion although lower than the prior quarter of N3.5 billion.

Consequently, the company reported a loss after tax of N2.2 billion for the quarter. Loss per share for Q1’17 is N1.48 compared to EPS of N0.24 in Q1’16.

Based on CardinalStone’s last review, GUINNESS has a target price of N74 (SELL).