October 22, 2026/Cordros Report
Guinness Nigeria Plc (GUINNESS) published its Q3-26 unaudited results after market close yesterday (22 October), reporting an EPS of NGN7.03 (+52.7% y/y), and bringing 9M-26 EPS to NGN18.58 (+53.1% y/y). The solid earnings performance was supported by topline growth (+41.0% y/y), a 16bps y/y expansion in EBIT margin to 17.0%, and a 77.2% y/y decline in net finance costs. Notably, the Board declared an interim dividend of NGN7.00/share, implying a dividend yield of 1.7% based on the last closing price of NGN423.00.
GUINNESS grew revenue by 41.0% y/y in Q3-26 (9M-26: +20.4% y/y), reflecting stronger sales volumes, resilient domestic demand and the residual benefit of earlier price increases. By geography, domestic sales, which accounted for 98.4% of revenue, grew by 41.3% y/y in Q3-26 (9M-26: +20.3% y/y), while export sales (1.6% of total revenue) rose by 24.7% y/y (9M-26: +23.8% y/y). On a quarter-on-quarter basis, revenue declined by 2.8%, broadly consistent with the seasonal moderation in demand typically recorded in Q3.
Gross margin expanded by 193bps y/y to 39.0% in Q3-26 (9M-26: unchanged at 37.5%), supported by robust revenue growth and better cost absorption on higher volumes, as cost of sales grew more slowly (+36.7% y/y) than the topline (+41.0% y/y). The flat 9M-26 outturn reflects the weaker Q1-26 performance, when cost of sales growth (+7.4% y/y) outpaced revenue growth (+3.7% y/y). Sequentially, gross margin advanced by 103bps q/q to 39.0%.
Meanwhile, EBIT margin expanded modestly by 16bps y/y to 17.0% in Q3-26, while EBITDA margin contracted by 61bps y/y to 20.3% (9M-26: +40bps and +53bps y/y to 16.1% and 19.3%, respectively), as operating expenses (OPEX) rose by 52.6% y/y (9M-26: +18.6% y/y). OPEX growth was driven by higher marketing costs (+105.4% y/y; 35.5% of OPEX), administrative expenses (+66.9% y/y; 25.8% of OPEX) and distribution costs (+17.9% y/y; 38.7% of OPEX).
Below the operating line, net finance costs declined by 77.2% y/y in Q3-26, underpinned by a 65.8% y/y reduction in finance costs, as interest on loans and borrowings fell by 67.6% y/y amid continued deleveraging. The finance cost savings more than offset a 63.9% y/y decline in finance income to NGN1.33 billion. In 9M-26, net finance costs declined by 74.3% y/y, driven by a 61.9% y/y reduction in finance costs, reflecting a 61.7% y/y contraction in interest on loans and borrowings, alongside a 6.5% y/y increase in finance income to NGN2.51 billion.
Finally, profit before tax (PBT) advanced by 47.0% y/y in Q3-26 (9M-26: +55.3% y/y), while profit after tax (PAT) grew by 52.7% y/y in Q3-26 (9M-26: +53.1% y/y).
Comment: GUINNESS delivered a strong Q3-26 performance, supported by robust topline growth, gross margin expansion, and materially lower finance costs amid continued deleveraging. That said, higher OPEX absorbed much of the gross margin gain, capping operating margins. Interestingly, the Board declared a third interim dividend of NGN7.00/share, bringing the total declared in respect of 2026FY to NGN16.00/share (3.8% yield), reflecting management’s confidence in the sustainability of the earnings recovery, a strengthened balance sheet, and a clear prioritisation of shareholder returns. Looking ahead, we expect earnings momentum to remain firm for the rest of 2026E, supported by sustained consumer demand, exchange rate stability and lower debt levels. However, continued marketing and distribution spend to support volume growth, elevated energy cost pressures and a rising cash tax burden as the deferred tax liability unwinds remain key risks to our outlook. Our estimates are under review.
