Nigeria: Nestlé Nigeria Plc Records Revenue of N261.8 billion During the First Half of 2023.

A prominent player in Nigeria’s Fast-Moving Consumer Goods (FMCG) sector, Nestlé Nigeria Plc has recorded a revenue of N261.8 billion during the first half of 2023.

This marks a substantial growth of 17.7% compared to its performance in the same period of 2022.

 Furthermore, the company achieved a gross profit of N107.3 billion, reflecting a significant 34% increase from the N80.205 billion earned in H1 2022.

 However, according to the financial results for H1 2023 submitted to the Nigerian Exchange Limited, Nestlé Nigeria reported a loss after tax of N49.9 billion, indicating a substantial 280% decline from the same period in 2022.

  A Nairametric report highlights that Nestlé Nigeria Plc incurred a pre-tax loss of N86.5 billion in the second quarter of 2023, leading to a decline in its half-year profits to N61.6 billion. This represents one of the company’s poorest performances in recent years.

 The losses experienced by Nestlé Nigeria can be primarily attributed to a forex loss of N123.7 billion, which significantly impacted its profits. As a result, the company’s retained earnings were greatly affected, potentially influencing its ability to distribute dividends in the current year if these issues are not addressed.

 The forex losses resulted in the complete depletion of the company’s net assets, erasing its net asset value of N46.4 billion as of the first quarter of the year. It’s noted that Nestlé Nigeria holds an intra-group loan of $454 million, which could have contributed to the forex losses encountered by the company. To counter the situation, Nestlé Nigeria might need to consider capital raising to address its negative equity, the conversion of some loans to equity, or hope for an improvement in forex rates.

 Wassim Elhusseini, the Managing Director and CEO of Nestlé Nigeria, remarked on the financial results. He expressed gratitude to the team for the growth in revenue and gross profit despite challenging business conditions. He acknowledged that the profit after tax was adversely affected by the Naira’s devaluation and the subsequent revaluation of foreign currency obligations.

Elhusseini emphasized the company’s commitment to optimizing operations and ensuring the availability of nutritious food and beverages in the upcoming months.