August 30, 2018/Cordros Report
Guinness Nigeria Plc released Q4-18 and 2018FY results yesterday. The Board has proposed a dividend of NGN1.84/share (c.3x 2017FY DPS) on the NGN6.7 billion net profit achieved in 2018FY (+249% vs. 2017FY).
Q4-18 performance (for the period ended June 2018) was not impressive, and will likely result in negative reaction to the stock in today’s trading.
For the three months period, EBITDA (-38% y/y and -16% q/q), EBIT (-55% y/y and -33% q/q), and net profit (-64% y/y and -45% q/q) all declined at double-digits – to the lowest levels since Q1-18.
Revenue grew y/y and q/q during the period, but it is worth noting that the q/q growth was at record-low level.
Gross profit margin improved vs. Q3-18 (+159 bps), but still sub Q4-17’s by high margin.
A major negative surprise (which also impacted earnings the most) was the 36% increase in opex vs. Q3-18 (and 1% vs. Q4-17).
We have a SELL rating on the stock as at our last update. Our forecasts are under review.
Management will hold a conference call today to discuss in detail, the 2018FY results.
| Income Statement (NGN’bn) | 2018FY | 2017FY | Q4-18a | Q4-y/y | Q4 q/q | Q3-18a | Q2-18a | Q1-18a |
| Sales | 142.98 | 125.92 | 37.49 | 4% | 7% | 34.93 | 40.65 | 29.90 |
| COGS | -94.35 | -77.60 | -24.45 | 23% | 5% | -23.34 | -27.03 | -19.53 |
| Gross profit | 48.63 | 48.32 | 13.04 | -19% | 13% | 11.59 | 13.62 | 10.37 |
| opex | -35.91 | -38.98 | -10.55 | 1% | 36% | -7.73 | -9.73 | -7.89 |
| Other income | 0.67 | 0.85 | 0.22 | -22% | 26% | 0.17 | 0.10 | 0.17 |
| EBIT | 13.39 | 10.19 | 2.71 | -55% | -33% | 4.03 | 4.00 | 2.65 |
| Int. expense | -5.64 | -9.78 | -0.65 | -41% | 222% | -0.20 | -0.96 | -3.84 |
| Int. income | 2.20 | 2.25 | -0.01 | -102% | -101% | 0.52 | 0.46 | 1.23 |
| PBT | 9.94 | 2.66 | 2.05 | -60% | -53% | 4.35 | 3.50 | 0.04 |
| Tax | -3.23 | -0.74 | -0.42 | -35% | -70% | -1.39 | -1.41 | 0.00 |
| PAT | 6.72 | 1.92 | 1.63 | -64% | -45% | 2.96 | 2.09 | 0.04 |
| EBITDA | 22.62 | 19.18 | 5.23 | -38% | -16% | 6.26 | 6.25 | 4.88 |
