The board of food beverages and confectioneries maker- Nestle Nigeria Plc, on Tuesday, expressed satisfaction with the ability of its business model to deliver satisfactory results, as well as customer loyalty, major components of its business model that would help meet shareholders aspirations in the months leading to the December 2019 year-end.
The company presented its Q1 numbers showing that profit before and after tax climbed by over 40% each after management successfully cut finance cost by almost 60% while growing finance income by 79.17%, while keeping in check the growth in marketing and distribution expenses and crashing administrative expenses marginally.
Specifically, revenue for the period inched 5.19% up from N67.463bn to N70.966bn, with sales revenue from Nigeria accounting for N69.952bn, up from N66.348bn, while export sales fell from N1.115bn to N1.014bn. Revenue for the period was boosted as usual by the food segment, which contributed N45.468bn, up from N43.014bn; followed by N25.498bn from the beverage segment, which also improved from N24.449bn. Cost of sales dropped by 5.29% to N39.497bn from N41.705bn; following which gross profit climbed 22.17% up from N25.757bn in the corresponding period of 2018, to N31.468bn.
Marketing and distribution expenses increased by 14.86% from N9.029bn to N10.371bn; even as administrative expenses dropped by 8.97% from N2.208bn to N2.01b; leading operating profit at N19.086bn, up by 31.46% from N14.519bn.
Finance income, being interest income on bank deposits increased to N504.003m from N281.299m; finance cost dropped from N1.159bn from N469.353m, with interest paid on financial liabilities dropping to N488.205m, down from N521.221m; just as net foreign exchange gains stood at N18.852m, as against the N638.669m loss in the corresponding period of 2018. As a result of this, net finance income stood at N34.65bn, compared to the preceding first quarter’s N878.591m costs.
Profit before tax, therefore, increased by 40.18% from N13.64bn to N19.121bn, the lion’s share of which was the N13.126bn from the food segment, marginally better than N12.743bn in 2018m while the beverage business segment recorded the biggest percentage growth of N5.96bn, up from N1.775bn in 2018. Tax expense jumped by 24.64% from N5.034bn to N6.274bn. Profit after tax therefore improved by 49.27% from N8.605bn to N12.846bn; translating to Earnings Per Share of N16.21, compared to N10.86 in 2018Q1.