April 16, 2026/Cordros Report

Guinness Nigeria Plc (GUINNESS) published their Q1-26 unaudited results on 14 April, reporting an EPS growth of 47.7% y/y to NGN4.74 (Q1-25: NGN3.21). The growth in earnings was supported by modest revenue growth (+3.7% y/y) and a significant reduction in net finance costs (-81.4% y/y). Notably, the Board declared an interim dividend of NGN2.00/share (c.NGN4.38 billion payout), reflecting confidence in earnings recovery.
 
GUINNESS reported modest revenue growth of +3.7% y/y in Q1-26 (Q1-25: +52.3% y/y), reflecting marginal volume recovery amid a still-fragile demand environment. Across segments, domestic sales continue to anchor performance expanding by 3.3% y/y to NGN120.90 billion (98.0% of revenue), while export sales grew by 39.0% y/y to NGN1.88 billion (2.0% of revenue). On a q/q basis, revenue declined by 9.8%, reflecting the normalisation of demand following the festive-driven spike in the prior quarter.
 
Meanwhile, gross margin contracted by 221bps y/y to 35.4% (Q1-25: 37.6%), as cost growth (+7.4% y/y) outpaced revenue (+3.7% y/y).  We attribute the elevated cost growth to higher energy input costs and supply chain disruptions, likely reflecting ongoing Middle East tensions.
 
Similarly, EBITDA and EBIT margin contracted by 56bps y/y and 121bps y/y to 17.2% and 14.0%, respectively further pressured by the slight uptick in OPEX (+0.2% y/y).  OPEX expanded on the back of higher administrative (+5.7% y/y) and distribution (+15.4% y/y) costs, partly mitigated by a 21.7% y/y drop in marketing spend.
 
Furthermore, net finance costs declined sharply by 81.4% y/y to NGN1.43 billion (Q1-25: NGN7.72 billion), driven by a steep decline in finance costs (-89.7% y/y to NGN2.48 billion), reflecting lower interest expense (NGN2.41 billion vs. NGN5.08 billion in Q1-25) and the absence of FX-related losses.
 
Overall, profit before tax (PBT) grew by 53.2% y/y to NGN15.75 billion, while profit after tax (PAT) increased by 64.6% y/y to NGN10.39 billion after accounting for a tax charge of NGN5.35 billion.
 
Comment: Guinness Nigeria Plc’s Q1-26 earnings were primarily driven by lower net finance costs, offsetting weak topline momentum and margin pressure. We view the resumption of dividend payments, following a return to positive retained earnings, as a key positive, highlighting a return to sustainable profitability. Looking ahead, we expect performance to improve, supported by volume recovery, a more favourable FX backdrop, easing interest rates, and continued balance sheet optimisation, although persistent cost pressures are likely to cap margin expansion. Our estimates are currently under review.