Nigeria, India, Ethiopia, Korea operations fail to help as Diageo global sales slump

DIAGEO PLC, THE UNITED KINGDOM global beverage producer and parent company of Guinness Nigeria, has conceded that sales dropped as the coronavirus pandemic prompted the closure of bars and eateries, with rising ecommerce business and market buys failing to fill the hole, as the organisation recorded £1.3 billion ($1.7 billion) impedance due to Covid-19 impacts.

According to the London based firm, the organization needed to take an erratic hit of £1.3 billion to mirror the lower value of its operating activities in India, Nigeria, Ethiopia and Korea as the infection swept across those business sectors. Consequently, company’s revenue fell 8 per cent in the year through June on a natural premise.

Operating profits plunged 47.1 per cent to £2.1 billion as deals fell about 9 per cent to £11.8 billion while development in deals in North America during the year to 30 June was more than balanced by substantial falls in different districts.

In spite of the foregoing, company CEO, Ivan Menezes said he would in any case still pay final dividends to investors as last year, of 42.47p a share, carrying the entire year dividend to 69.88p, up 2 per cent on a year before.

Menezes described the situation as a “year of two halves,” saying: “After a good, consistent performance in the first half of fiscal year 2020, the outbreak of Covid-19 presented significant challenges for our business, impacting the full-year performance.

“However, the extensive restructuring of the business over the past six years had created an organisation with the flexibility to respond to the crisis. We are now a more agile, efficient and effective business.

“While the trajectory of the re- covery is uncertain, with volatility expected to continue into fiscal ‘21, I am confident in our strategy, the resilience of our business... We are well-positioned to emerge stronger,” Menezes said.

The payment of dividend is probably going to be viewed as a compensation for investors after Diageo put on hold a 3-year plan to return £4.5 billion to them as the organization tousled to de- fend its balance sheet report. That procedure also included doing a $2 billion bond issue earlier than planned and set up a £2.5 billion credit facility with banks.