April 25, 2025/Cordros Report

Guinness Nigeria Plc (GUINNESS) published its unaudited Q3-25 results yesterday (24 April), revealing a Q3-25 standalone earnings per share of NGN3.21 (vs loss per share of NGN25.76 in Q3-24), resulting in an earnings per share of NGN3.07 in 9M-25 (9M-24: loss per share of NGN28.15). The brewer’s performance in the period was driven by topline growth (+52.4% y/y) and a notable decline in net finance costs (-87.5% y/y), aided by FX remeasurement gains.
 
GUINNESS posted a 52.3% y/y revenue increase in Q3-25 (9M-25: +71.6% y/y), which we attribute to a blend of volume growth, effective pricing, and enhanced product offerings. We believe this strong performance reflects not only improved consumer engagement and trade support via digital platforms but also the resilience of their portfolio —particularly within the Non-Alcoholic Malt, Ready-to-Serve, and International Premium Spirits segments.
 
However, revenue declined by 11.5% on a quarter-on-quarter basis, which we believe was due to the seasonal impact of the fasting period.
 
Gross margin expanded by 967bps y/y to 37.6% in Q3-25, supported by strong topline growth (+52.3% y/y) outpacing the rise in cost of sales (+31.8% y/y). This translated to notable improvements in EBITDA and EBIT margins, which rose by 849bps y/y and 772bps y/y to 22.4% and 15.2%, respectively, despite a 61.4% y/y increase in operating expenses. However, on a cumulative basis, 9M-25 EBITDA and EBIT margins declined by 349bps y/y and 235bps y/y to 10.0% and 7.7%, respectively, weighed by earlier periods of gross margin weakness.
 
Further down, net finance cost dropped significantly by 87.5% y/y to NGN7.72 billion in Q3-25, driven by a 263.4% y/y increase in finance income and a 63.8% y/y decline in finance costs. The sharp rise in finance income largely reflects a 332.8% y/y surge in FX remeasurement gains on foreign currency balances.

Overall, GUINNESS reported a PBT of NGN10.28 billion in the quarter, compared to a pretax loss of NGN56.02 billion in Q3-24. Following a tax expense of NGN3.25 billion in the quarter (Q3-24: NGN394.96 million), the profit after tax settled at NGN7.03 billion (vs loss after tax of NGN56.42 billion in Q3-24).
 
Comment: Although cost pressures remain elevated and weighed on 9M-25 margins, the Q3 marks a clear turning point. In our view, this reinforces the outlook for a sustained recovery, supported by improving operational efficiencies and the gradual crystallisation of synergies from the Tolaram acquisition—particularly across procurement, distribution, and route-to-market channels. These factors are expected to drive further cost optimisation and profitability gains in the period ahead. Our estimates are under review.