GUINNESS Declares N835.66m PAT in Q1 2019 Results (SP:N80.60k)

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Thursday, October 25, 2018 9.41PM / NSE with additional comments from FBNQuest Research

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FBNQuest – Initial Reaction 

Implications: On an annualised basis, Guinness’ PBT of N1.2bn tracks well behind consensus 2019E PBT (end-June) forecast of N12.5bn. As such, we expect to see marked downward revisions to consensus 2019E PBT forecast and a negative reaction from the market.

 

Positives: Net interest expense fell by -84% y/y leading to a 28.9x growth in  PBT to  N1.2bn. However, the PBT growth was flattered by favourable base effects in the prior year.                                                                   

 

Negatives: Sales declined by -6% y/y to N28.1bn. PBT surprised negatively (by c. -50%) relative to our forecast. PBT also tracks well behind consensus 2018E forecast of N12.5bn. In addition to the slow-down in unit volume growth arising from the squeeze in household wallets, increased competition, price discounting and an increase in the excise duty regime are some of the headwinds exerting pressure on sales and earnings.  

 

Rating: We rate Guinness Nigeria shares Neutral. Our estimates are under review. 

 

Guinness Nigeria Q1 2019 (end-Sep) results: actual vs. FBNQuest Capital Research estimates (N millions)

Q1 2019 (end-Sep)

 

Actual

Y/y

Q/q

FBNQuest Capital  est.

Act. vs      FBNQuest Capital est (%)

Net sales

28,094

-6.1%

-25.1%

34,390

-18.3%

Cost of sales

-18,985

-2.8%

-22.4%

-22,697

-16.4%

Gross profit

9,109

-12.2%

-30.1%

11,692

-22.1%

-Gross margin

32.4%

-226bps

-236bps

34.0%

-158bps

Dist. and admin. exp

-7,639

-3.2%

-27.6%

-9,044

-15.5%

Other income

191

11.8%

-13.2%

251

-24.0%

Operating profit

1,660

-37.3%

-38.7%

2,899

-42.7%

Net Interest expense

-432

-83.5%

-34.2%

-464

-7.0%

PBT

1,229

2869%

-40.1%

2,435

-49.5%

- PBT margin

4.4%

424bps

-110bps

7.1%

-270bps

Tax

-393

n/a

-6.9%

-730

-46.2%

-Tax rate

32.0%

3200bps

1141bps

30.0%

200bps

PAT

836

1918.6%

-48.7%

1,704

-51.0%

- PAT margins

3.0%

284bps

-137bps

5.0%

-198bps

Source: NSE; FBNQuest Capital Estimates

 

Find out more information, Click here to access GUINNESS’s IR Portal in Proshare Markets


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