Sales, Admin and Finance Limits Nestle’s Profit
The fast moving consumer goods giant, Nestle’s audited results for the year ended December 31, 2014 showed that it made a profit before tax of N24.446bn, down from N26.047bn in 2013.
A 41 per cent drop in taxation – from N3.789bn in 2013 to N2.210bn in 2014, however, helped the company to avoid a similar drop in profit after tax for the year.
The results, which the company filed with the Nigerian Stock Exchange, showed that its profit after tax for the year stood at N22.236bn, 0.09 per cent less than the N22.258bn PAT it declared for 2013.
For the year under review, Nestle Nigeria reported a 7.69 per cent increase in revenue.
Precisely, its revenue rose from N133.084bn in the financial year ended December 31, 2013 to N143.329bn in 2014 but the increase in revenue was neutralised by higher costs.
The cost of sales, for instance, rose by 7.6 per cent year-on-year; from N76.298bn to N82.099bn, while the administrative expenses jumped by 21.92 per cent from N6.020bn a year earlier to N7.340bn in the year under review.
Finance costs soared by 147 per cent from N2.147bn to N5.305bn due to the devaluation of the naira, while distribution, sales and marketing expenses rose by 7.66 per cent from N22.933bn to N24.689bn.
The company also reported a 1.98 per cent dip in its total assets year-on-year. The results showed that its total assets declined from N108.207bn to N106.062bn.
The company’s board of directors has, however, proposed a final dividend of N17.50 per share, having already paid an interim dividend of N10 per share.
While the interim dividend, totaling N7.926bn, was 567 per cent higher than the N1.189bn interim dividend it paid in 2013, the final dividend, which amounts to N13.871bn, is 27 per cent less than the N19.023bn final dividend of 2013.
However, the total dividend for the year – N21.798bn, represents an eight per cent increase on the N20.213bn total paid in 2013.
In a notice on the dividend proposal to the NSE by the Company Secretary and Legal Adviser, Bode Ayeku, Nestle Nigeria said, its performance in 2014 was encouraging and that it would intensify efforts to ensure that it continues to meet the needs of its consumers.
It said, “We are pleased with the turnover growth despite the challenging macro-economic environment. It is encouraging that we sustained almost the same level of profit after tax in 2013, notwithstanding the devaluation of the naira which increased our net finance costs.
“We will continue to increase our marketing investments, accelerate innovation and ensure that our pricing is always sensitive to consumer needs.”
The company added that its directors had resolved to recommend the final dividend from the pioneer profits of the company to the shareholders for approval at its Annual General Meeting to be held on May 11, 2015.