July 23, 2026/Cordros Report
Guinness Nigeria Plc (GUINNESS) published its Q2-26 unaudited results after close of business yesterday, reporting an EPS of NGN6.81 (+57.3% y/y), and bringing H1-26 EPS to NGN11.55. The strong earnings outturn was underpinned by revenue growth (+19.9% y/y), a 180bps y/y expansion in EBIT margin to 17.1%, and a 62.1% y/y decline in net finance costs. Notably, the Board declared an interim dividend of NGN7.00/share, implying a dividend yield of 2.1%.
GUINNESS grew revenue by 19.9% y/y in Q2-26 (H1-26: +11.8% y/y), reflecting resilient domestic demand and the benefit of previously implemented price increases. By geography, domestic sales, which accounted for 98.4% of revenue, grew by 20.0% y/y in Q2-26 (H1-26: +11.7% y/y), while export sales (1.6% of total revenue) rose by 12.7% y/y (H1-26: +23.4% y/y). On a quarter-on-quarter basis, revenue rose by 15.9%.
Gross margin expanded by 15bps y/y to 37.9% in Q2-26 (H1-26: -94bps y/y to 36.8%), as topline growth outpaced cost of sales growth (+19.6% y/y). The H1-26 contraction reflects the weaker Q1-26 outturn, when cost of sales growth (+7.4% y/y) outpaced revenue growth (+3.7% y/y), compressing gross margin by 221bps y/y to 35.4%. Meanwhile, gross margin improved by 254bps q/q to 37.9%, supported by stronger revenue growth (+15.9% q/q) relative to cost of sales (+11.3% q/q), reflecting easing in cost pressures.
Similarly, EBIT and EBITDA margins expanded by 180bps y/y and 205bps y/y to 17.1% and 20.1%, respectively, in Q2-26 (H1-26: +40bps y/y and +89bps y/y to 15.7% and 18.8%, respectively), despite an 11.6% y/y increase in operating expenses (H1-26: +5.9% y/y). OPEX growth was driven by higher marketing and distribution costs (+14.7% y/y | 72.8% of OPEX) and administrative expenses (+4.0% y/y | 27.2% of OPEX).
Furthermore, net finance costs declined sharply by 62.1% y/y in Q2-26, underpinned by a 78.0% y/y reduction in finance costs on the back of lower interest on loans and borrowings (-65.7% y/y) as the group continues to deleverage, which more than offset a 96.6% y/y decline in finance income to NGN0.13 billion. In H1-26, net finance costs declined by 74.2% y/y, supported by a 64.9% y/y reduction in finance costs, reflecting a 59.3% y/y contraction in interest on loans and borrowings, alongside a 967.2% y/y increase in finance income to NGN1.18 billion.
Finally, profit before tax (PBT) increased by 66.7% y/y in Q2-26 (H1-26: +60.9% y/y), while profit after tax (PAT) grew by 57.3% y/y in Q2-26 (H1-26: +53.3% y/y).
Comment: GUINNESS delivered a strong Q2-26 performance, supported by robust revenue growth, improved operating leverage, and materially lower finance costs following continued balance sheet deleveraging. Interestingly, the Board’s declaration of an interim dividend of NGN7.00/share reflects management’s confidence in the sustainability of the company’s earnings recovery and strengthened balance sheet. Looking ahead, we expect earnings momentum to remain firm in 2026E, supported by resilient consumer demand, exchange rate stability, and continued cost discipline, which should anchor margin expansion. However, elevated energy costs stemming from higher oil prices, competitive pricing pressures, and softer-than-expected volume growth remain key risks to our outlook. Our estimates are under review.
