Consumer demand unlikely to worsen - Guinness Nigeria

Tuesday, 12 February 2013 15:58 Bloomberg

Guinness Nigeria Plc says consumer demand is unlikely to deteriorate further in the rest of its fiscal year. “What we have seen in the first half is still a soft market and it’s all to do with the discretionary income of the consumer remaining challenged,” Chief Executive Officer Seni Adetu told an analysts conference today. “We are not expecting the second half worst than the first half.”

Guinness Nigeria, the local unit of the world’s biggest distiller Diageo Plc, reported a 16 percent decline in net income to 6.42 billion naira for the six months ended Dec. 31, 2012. Inflation in Africa’s most populous nation boosted raw material costs and limited consumer spending on beer and non-alcoholic beverages.

Consumer-price inflation stayed above 10 percent last year in Nigeria after the government increased the cost of fuel and the country’s two biggest rivers overflowed their banks killing 363 people and damaging farmland.

Trade in the north of the country has suffered from unrest stirred by the Islamist militant group Boko Haram, Adetu said. Boko Haram has carried out gun and bomb attacks in the mainly Muslim north and the capital, Abuja, in which hundreds have been killed since 2009.

The company has spent about 140 million pounds on expanding its brewing operations in Nigeria and will invest a further 80 million pounds, matching a target set in March 2011, said Adetu.

Guinness Nigeria’s shares climbed 0.2 percent to 296.5 naira at the 2:30 p.m. close in Lagos, the commercial capital. The stock has risen 8 percent this year, compared with the 22 percent rise of the Nigerian Stock Exchange All-Share Index.

The company has spent about 140 million pounds on expanding its brewing operations in Nigeria and will invest a further 80 million pounds, matching a target set in March 2011, said Adetu.