Golden Guinea Breweries’ losses double in the year ended 31st March 2022

Golden Guinea Breweries Plc (NGX: GOLDBREW) has reported a 40% increase in revenue and a 121% increase in loses for the financial year ended 31st March, 2022.

The Umuahia based brewer of Golden Guinea beer posted its financial statements to the Nigerian Exchange Limited on Friday, 12th August 2022.

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The mounting loss may come as a surprise to many, as the brewer returned to profitability in the first half of the financial year, posting a profit of N18.88 million.

Analysis of the Financial Statements

Income Statement:

Revenue: N2.04bn, compared to N1.46bn earned in he preceding year, representing a growth of 40%. The company said it is gradually increasing business operations with brewing, bottling, and marketing of its products, having resumed business operations in 2020 financial year. All sales were made in Nigeria.
Cost of Sales: The company spent N2.20bn selling its products, almost 50% higher than the N1.42bn it spent doing the same in the preceding year.
Gross Profit: Having spent more in selling goods than it earned, the company reported a gross loss of N158.44mn, against the N41.23mn gross profit it reported in the preceding financial year.
Administrative Expenses: The administrative expenses was marginally up, from N329.84mn to N375.32mn.
Finance Charges: Golden Guinea incurred no finance cost and earned no finance income.
Profit Before Tax: N527.20mn loss, against N247.90mn loss in the preceding year.
Profit After Tax: N498.66mn loss, against a loss of N225.87mn loss in the preceding year.
Earnings Per Share: Nil as the company reported loses.

Balance Sheet:

Total Assets: N5.07 billion, compared to N4.87 billion as at 31st March 2021. Of these assets, N4.25bn is on property, plant and equipment under non-current assets. The company’s inventories stood at N691.69 million, while its trade and other receivables was N109.98mn. It’s cash and short term deposits was N17.09mn.
Total Liabilities: N3.05 billion. Golden Guinea holds no debts as per their statement of financial position. Trade and Other Payables rose to N3.08bn, from N2.35bn.
Shareholders’ Fund: stood at N1.99 billion, an increase from N2.49 billion as at 31st March 2021.
Retained earnings: This is minus N3.87bn, against minus N3.37bn.

Cashflow:

Operating activities: N73.28 million was used in operating activities, against N127.08 million used in 2021.
Investing activities: N31.58 million was used for investing activities, against N77.35mn used 2021.
Financing activities: Nil
Cash and cash equivalents at the end of the period was N17.09 million (2021: N121.96 million).

There was no corporate action announcement following the release of the financial statements.

About the Company

Golden Guinea Breweries Plc, a public company quoted on the Nigerian Stock Exchange, was incorporated on 26th September, 1962. The company was incorporated as a private company under the name Independence Brewery Limited with registration number RC 3164.

The name of the company was changed to Golden Guinea Breweries Limited on 6th May, 1971. The company became a public company (Golden Guinea Breweries Plc) in 1978. The principal activities of the company are brewing, packaging, marketing, and distribution of Golden Guinea lager beer, Golden Guinea Malta, Eagle Stout, Bergedorf lager beer, Golden Malta, Oldsborg Lager beer and Oldsborg Malta.

The company has gradually resumed the principal activities with brewing, bottling, and marketing of Golden Guinea Lager beer in 2020, following successful reactivation activities, and the company has commenced market re-entry. In 2021, the company introduced Golden Malta, Oldsborg Lager Beer, and Oldsborg Malta. Duriing the year 2021/2022, the company continued to sustain its products offering and market penetration with Lager Beer and Malt products; which are packaged in Bottles and Cans.

Golden Guinea Breweries Plc is located in Umuahia, Abia State. It was founded in 1962 by the Eastern Nigerian regional government as an indigenous competitor to foreign manufacturers in the country. Golden Guinea was originally named Independence Brewery Limited, the location was chosen due to the importance of water which led to the selection of a site in Umuahia, the town of the regional premier, Michael Okpara. Production started in 1963 with an annual capacity of 1 million gallons.