Food beverages giant, Nestle Nigeria Plc, at the weekend presented its unaudited financials for the half-year ended June 30, ahead of next week’s regulatory deadline, with highlights such as a faster growth in profit than revenue, as management successfully held cost in checks, raising hopes for juicier dividends for shareholders at year-end, should things continue at this pace or even better.
Revenue from products sale could only rise by N6.613bn or 4.88% from N135.295bn in the first half of 2018 to N141.909bn, which analysts have linked to the declining purchasing power of Nigerians during the period under review, for many obvious reasons.
The food segment of the business remained its biggest revenue spinner, accounting for N88.239bn, slowly from N85.129bn; just like beverages, which inched from N50.166bn to N53.669bn.
Operating costs however dropped from N79.718bn to N75.828bn, representing a decline of N3.889bn or 4.87%; following which gross profit inched N10.502bn or 18.89% up to N66.08bn, compared to N55.577bn in the prior half-year.
Marketing and distribution expenses increased to N21.281bn from N19.031bn; while administrated expenses stood at N4.365bn from N4.392bn; as operating profit improved by N8.28bn or 25.75% from N32.153bn in 2018 to N40.434bn
Finance income rose marginally from N838.161m to N891.095m, boosted by interest income on bank deposit of N852.439m from N838.161; just as there was a net foreign exchange gain of N38.656m. Finance cost dropped to N230.151m or 20.57% from N1.118bn to N888.676m, all of which was interest expense on financial liabilities, just as the company suffered N50.191m net foreign exchange loss in the first half of 2018. Net finance income for the period stood at N2.419m, compared to a net cost of N280.666m.
Profit before tax, therefore, grew by N8.564bn or 26.86% to N40.436bn as against the preceding half-year’s N31.872bn, with the food business generating a profit of N26.568bn or 60.47%; up from N24.455bn or 76.72% in the similar period of 2018; leaving the beverage segment with N13.865bn, up from N7.697bn. Income tax expense for the period climbed by N3.755bn or 36.25% from N10.414bn to N14.19bn; left net profit at N26.246bn, compared to N21.457bn in 2018, representing an increase of N4.788bn or 22.31%. The net profit, therefore, translated to earnings per share of N33.11 from N27.07 each.