E-Malt.com News article: Ghana: Guinness Ghana Breweries increases turnover in FY 2010

Shareholders of the Guinness Ghana Breweries Limited (GGBL) last week came face-to-face with the realities of the depressed beer market, when the Board of Directors decided not to pay dividends for the financial year, GhanaWeb reported on November, 25.

The situation which, according to the Board, was due to the impact of the increase in excise duty, coupled with poor water supply and electricity, resulted in a loss of over 10 per cent of production volumes.

The company, however, maintained its strong leadership of the beer market and continued growth in the non-alcoholic sector.

Addressing shareholders at the Annual General Meeting (AGM) last week, the Chairman of the Board, Mr. David Harlock said the operating environment in the year under review was very challenging, but stated that the company’s turnover increased by 2.8 per cent from GHC200,968 million in 2009 to GHC206,499 million in 2010 financial year, which ended in June 2010.

Trading profit grew by 48 per cent from GHC14.8 million to GHC21.8 million on a restated basis.

“However, operating profit after interest charges and taxes was a loss position given the high cost of borrowing and increase in excise duties”, he said.

He further stated the company’s continuous investment in a sorghum project in northern Ghana with the aim to use more locally grown sorghum in its brewing process, thereby reducing the use of imported barley.

Commenting on the performance, the Managing Director of GGBL, Mr. Ekwunife Okoli, said the worst part of the challenges faced in the financial year under review were over, adding that the company’s cost of borrowing was reducing.

“We are successfully managing down our operating cost”, he said. He observed that the company’s brands are still strong and the first choice of consumers, adding that they will continue to partner government to find the right level of excise duties.

Mr. Okoli was of the view that with the Gross Domestic Production forecasted to be in the double digits in 2011, the company looks into the future with cautious optimism.


26 November, 2010