• More growth seen among cheaper beer brands, says FBN Capital
  • Unit of Diageo Plc proposes dividend of 3.20 naira a share

Guinness Nigeria Plc, the country’s second biggest brewer, said full-year net income fell 19 percent to 7.8 billion naira ($39 million) as weaker economic growth hurt consumption of pricier beer brands in the continent’s most populous country.

Revenue rose 9 percent to 118.5 billion naira in the year through June, while costs climbed 8 percent and tax payments soared 42 percent, the Lagos-based unit of London-based Diageo Plc said in a statement published on the Nigerian Stock Exchange’s website on Monday. The brewer proposed a dividend of 3.20 naira per share, payable on Nov. 27.

The slump in profit came as Nigeria suffered from lower crude prices, with government revenues declining and public sector workers going unpaid for months. Economic growth was 2.4 percent on an annualized basis in the second quarter, down from 6.5 percent a year earlier.

“Following the challenging macro-environment and the squeeze on household wallets, growth in the mainstream segment has been constrained, with more growth seen” among Guinness’s cheaper brands, Tunde Abidoye, a Lagos-based analyst at FBN Capital Ltd., said in a research note.

Guinness Nigeria’s shares were unchanged at 128 naira by 11:04 a.m. in Lagos. They fell 7.7 percent on Sept. 4, the most since Jan. 8. The shares are down 24 percent this year, in line with larger competitor Nigerian Breweries Plc, part owned by Heineken NV. The Nigerian Stock Exchange All Share Index is down 14 percent.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE