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VENTURES AFRICA – Guinness Nigeria, subsidiary of alcoholic beverage giant Diageo Plc, has seen its half-year pre-tax profit dip by 32 percent to N6.41 billion ($39.34 million) due to higher operating costs.
The company also recorded a decline in net profit by 17 percent from N14.2 billion ($87.3 million) to N11.8 billion ($72.5 million), according to a filing made to the Nigerian Stock Exchange.
A study of the company’s fiscal report for 2013 indicated that the slide in profits was largely due to higher operating and finance costs. Administrative and distribution costs increased by 7 percent from N34 billion ($209 million) in 2012 to N36.2 billion ($222.6 million) in 2013, while finance cost grew by 138 percent from N1.5 billion ($9.2 million) to N3.6 billion ($22.14 million).
A similar occurrence was noticed during the same period in 2012 when cost of sales increased to N37.158 billion ($228.5 million) as against N34.726 billion ($213.56 million) the previous year.
Profit before tax in the half year 2012 also dropped by 15.7 percent to N9.44 billion ($58.05 million) as compared to N11.203 billion ($68.89 million) recorded in 2011 while profit after tax fell by 15.7 percent to N6.419 billion ($39.47 million) as compared to N7.618 billion ($46.85 million) recorded the previous year.
As of today, the company has already lost N5 ($0.03) on its shares, which opened at N197 ($1.2) but is currently standing at N192 ($1.17).