Nestle Nigeria’s revenue hits N261.8bn in H1 2023
By Ibidunni Banjoko
Nestlé Nigeria Plc, one of the largest multinationals in Nigeria’s Fast-Moving Consumer Goods (FMCG) industry, reported revenue of N261.8 billion in the first half of 2023, an increase of 17.7 percent when compared to its performance in the same period of 2022.
Also, the company’s Gross profit hit N107.3 billion, a 34 percent increase over N80,205 billion earned in H1 2022.
According to the H1 2023 financial results submitted to the Nigerian Exchange Limited, the company, however, reported a loss after tax of N49.9 billion, a 280 percent decline over the same period in 2022.
In a Nairametric report, Nestle Nigeria Plc has a pre-tax loss of N86.5 billion in the second quarter of the year ended June 30, 2023. The losses contributed to wiping our Q1 profits taking its half-year profits to N61.6 billion one of the worst performances in years.
Nestle Nigeria’s losses are mainly due to a forex loss of N123.7 billion which impacted its profits. The impact of the losses essentially wiped out Nestle’s retained earnings which could impact its ability to pay dividends this year if it is not able to address the issues.
Its net assets are also wiped out in one fell swoop as a result of the forex losses. Nestle had a net asset of N46.4 billion as of the first quarter of the year.
Nestle has an intra-group loan of $454 million which may have contributed to the forex losses the company experienced.
Nestle might at this rate either raise capital to close the negative equity or convert some of the loans to equity or expect succor from forex appreciation.
While commenting on the results, Wassim Elhusseini, Managing Director and CEO of Nestlé Nigeria, said: “I thank every member of our team for the unwavering commitment and dedication which resulted in the significant increase in revenue and gross profit over H1 2022 despite the challenging business environment.
“Our profit after tax was, however, negatively impacted by the recent devaluation of the Naira, which necessitated the revaluation of our foreign currency obligations.”
“Going into the second half of the year, we will continue to focus on optimising our operations to ensure the availability and accessibility of the nutritious food and beverages our loyal customers expect from us,” he mentioned.
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