A growth in sales revenue and net finance income of food beverages and confectioneries maker- Nestle Nigeria Plc, helped to deliver a quarter per cent growth in net profit for the first quarter ended March 31, 2017.
According to the report presented to the Nigerian Stock Exchange (NSE) on Friday evening, the net profit could have been much more robust, if not for the N3.879bn or 189.8% increase in income tax expense from N2.044bn in the corresponding period of 2016, to N5.923bn.
A breakdown of the result showed that sales revenue rose to N61.151bn, a N25.021bn or 69.25% from the previous first quarter’s N36.13bn. This growth was wiped off by the significant 105.56% rise in cost of sales, which jumped by N19.318bn from N18.35bn to N37.668bn.
This resulted in gross profit of N23.483bn, as against the previous N17.78bn; marketing and distribution expenses rose to N8.047bn from N6.743bn; while administrative expenses from N2.011bn to N2.225bn; bringing results from operating activities to N13.209bn, as against the previous N9.025bn.
Finance income rose by N2.121bn or 441.72% from N480.17m to N2.601bn; just as finance costs jumped to N1.528bn from N780.34m; resulting in net finance cost of N1.072bn from N300.17m.
Profit before tax therefore stood at N14.282bn, after rising by N5.557bn or 63.69% from the previous N8.725bn; while net profit increased by N1.677bn or 25.1%, representing earnings per share of N10.55, as against the previous first quarter’s 843 kobo.
A statement to the NSE by Bode Ayeku, Company Secretary/Legal Adviser also linked the growth net profit to the company’s “internal cost saving initiatives (and) operating efficiency”.
He expressed the optimism of the board and the management “about the long term potential of the business despite the current macroeconomic environment. The company will continue to increase investments behind brand and route-to-market activities while proactively managing input cost pressures.”