Nestlé Nigeria Reports N50bn Half-year Loss, As Naira Devaluation Spikes Finance Cost Growth

Nestlé Nigeria, at the weekend announced released its half-year unaudited result for the period ended June 30, 2023, indicating that shareholders may not get any dividend by year end, except a miracle happens soon, judging by the company’s loss after tax of N49.981bn, against the previous N27.751bn, following a 1,877.98% spike in finance cost in the period under review in the aftermath of the recent Naira devuation.
According to the result submitted to the Nigerian Echange Limited, revenue for the first half of 2023 stood at N261.8bn, a 17.7% rise over the N222/45bn reported in the prior half year, while cost of sales soared to N154.434bn from N142.245bn; resulting in gross profit of N107.3bn, from the N80.205bn earned in H1 2022, a 34% growth.
Marketing and Distribution expenses jumped to N40.31bn from N28.352bn; administrative expenses grew to N6.231bn from N5.671bn; leaving operating profit at N60.792bn, compred to N46.181bn.
Finance income for the period grew to N7.815bn, against the N4.521bn of 2022; while finance cost spiked by N130.762bn from the previous N6.962bn to N137.725bn, resulting in Net finance costs of N129.91bn, against the previous N2.441bn.
Loss before income tax, therefore stood at N69.117bn, compared to the previous half year’s N43.739bn; and after tax loss of N49.981bn, representing a 280% decline over the net profit of N27.7521bn, representing a 280% decline, due to the N19.136bn tax expense, which rose from N15.988 in the prior half year

Commenting on the score-card, a statement by the company quoted Wassim El-Husseini, its Managing Director and CEO as nonetheless appreciating members of the team “for the unwavering commitment and dedication which resulted in the significant increase in revenue and gross profit over H1 2022.”
The impact of the growth, he lamented was, however blurred by “the challenging business environment.”
Specifically, he noted that “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 assured.