Nestlé Nigeria Blames FX Revaluation Impact For N79.5bn 2023 Loss

Food beverages and confectioneries maker- Nestlé Nigeria Plc, on Wednesday presented its audited financials for the year ended December 31, 2023, showing that despite a revenue growth of over N100 billion, the company posted a loss after tax of N79.473bn, following which the directors are unable to recommend a dividend for approval of shareholders at the next annual general meeting.

Commenting on the performance, a statement by the company quoted Wassim Elhusseini, Managing Director and CEO of Nestlé Nigeria, explained that the Naira devaluation in 2023.

This, he added, “led to a revaluation of our foreign currency obligations undoubtedly impacted our financing cost and consequently the profit after tax.”

The CEO who appreciated the effort of the management and staff for the unwavering commitment and dedication which resulted in the strong revenue growth and operating profit vs 2022 despite the challenging economic environment, expressed optimism about the company’s “capacity to overcome the current economic difficulties and emerge stronger.”

According to the result presented to the Nigerian Exchange Limited, sales revenue rose by 22% from N446.819bn to N547.118bn; with cost of sales rising to N329.945bn from N291.054bn; leaving gross profit at N217.173bn, compared to the previous N155.764bn.

Marketing and distribution expenses rose from N57.331bn to N73.779bn; while administrative expenses jumped to N20.089bn from N10.935bn; just as operating profit stood at N123.787bn from N87.468bn.

Finance income for the period rose from N4.777bn to N5.69bn; while finance cost ballooned to N233.503bn from just N21.136bn; resulting in a net finance cost of N227.813bn, compared to the previous N16.359bn.

These threw the company into a loss before tax of N104.025bn from its previous profit of N71.109bn; while the income tax credit of N24.551bn resulted in a loss after tax of N79.473bn, representing a decline of 280%; compared to the previous income tax expense of N22.143bn that left prior year’s net profit at N48.4965bn. The net loss, therefore, translated to a loss per share of N100.26, compared to the previous N61.77 earnings per share.

Looking ahead, Elhusseini said the company “remain dedicated to our purpose of unlocking the power of food through responsible local sourcing and confection of the high-quality nutritious food and beverages that families across Nigeria prefer.

“We also remain steadfast in optimizing our operations to ensure the availability and accessibility of affordable and nutritious products to our consumers in anticipation of a timely turnaround in the business environment,” he stressed.