Guinness Nigeria Plc reported a 53.1% increase in profit after tax to N40.69 billion for the nine months ended September 2026, up from N26.59 billion in the same period last year. This growth was driven by a 20.4% increase in revenue to N403.33 billion and a 23.4% rise in operating profit to N64.98 billion. The company's profit before tax also climbed 55.3% to N61.65 billion, largely due to lower finance expenses.
Despite the surge in profits, Guinness Nigeria's cash generated from operating activities declined 16.8% to N51.56 billion, down from N62.00 billion in the same period last year. The company's cash and cash equivalents, after overdrafts, moved from a positive N6.45 billion at the start of the year to a negative N1.41 billion at September-end. This decline in operating cash flow was attributed to a significant increase in inventory, which rose 43.3% to N65.65 billion at September-end.
The increase in inventory was a major pressure point, with finished goods more than doubling to N17.50 billion from N7.16 billion, and raw materials and consumables increasing to N33.68 billion from N25.16 billion. Work in progress fell to N2.22 billion from N4.58 billion. The cash-flow impact of the inventory increase reversed the previous year's position, with inventory movements absorbing N19.83 billion in cash, compared to a release of N17.58 billion in the same period last year.
Guinness Nigeria spent N28.16 billion on property, plant, equipment, and intangible assets, leaving about N23.40 billion in operating cash after capital expenditure. Financing activities then recorded a net outflow of N30.60 billion, with the company repaying N90.29 billion in loans and taking new borrowings of N83.28 billion. Total loans and borrowings fell to N38.21 billion at September-end from N43.92 billion in December 2025.
The company's liquidity weakened over the period, with cash and cash equivalents on the balance sheet falling to N1.40 billion from N6.97 billion, while bank overdrafts increased to N2.80 billion from N523.54 million. After overdrafts, the cash-flow statement reported a negative N1.41 billion balance at September-end. Dividend commitments add to the demands on future cash generation, with the board declaring an additional interim dividend of N7 per share, worth about N15.33 billion.
The company's earnings recovery is supported by revenue growth, higher operating profit, and lower finance expenses. However, operating cash declined, inventory absorbed N19.83 billion, and cash net of overdrafts turned negative. The next test is whether the company can sell down its higher stock, improve cash collections, and meet investment and dividend commitments without rebuilding liquidity pressure.
Guinness Nigeria's ability to generate cash from operations will be crucial in meeting its financial obligations, including dividend payments and capital expenditure. The company's management will need to strike a balance between investing in growth initiatives and maintaining a healthy cash position. With a strong brand presence in Nigeria, Guinness Nigeria is well-positioned to navigate the challenges and capitalize on opportunities in the market.
Key points
- Guinness Nigeria's profit after tax rose 53.1% to N40.69 billion in the nine months ended September 2026.
- Cash generated from operating activities fell 16.8% to N51.56 billion despite the increase in profit.
- Inventory rose 43.3% to N65.65 billion at September-end, tying up an additional N19.83 billion in cash.
