Nestlé Nigeria Net Loss Expands by 107% to N165bn
Nestlé Nigeria Plc net loss increased sharply in 2024, according to earnings results, on the back of lingering pressures in the consumer sectors. The consumer goods company’s loss after tax climbed to N164.595 billion in 2024, up by 107% year on year from N79.473 billion in the comparable period in 2023 despite huge tax credits.
Details from Nestle Nigeria’s financial scorecard showed that revenue increased by 75% year on year to N958.814 billion in 2024, from N547.118 billion in 2023. But costs of sales rose faster than revenue growth, dragging margin lower year on year as the company faced with negative impacts of Nigeria’s damaging inflation on input costs.
Costs of sales increased by 97.74% to N652.459 billion in 2024 from N329.945 billion in the comparable year in 2023. The results reflects lingering pressures in the Nigerian business environment. Companies’ performances have been hit by higher borrowing rate and rising inflation condition, worsened by weak local currency.
In 2024, Nestle Nigeria’s net finance costs increased strongly due to high interest rate on the company’s borrowings. This happened amidst slowed down in finance income, which settled at N3.367 billion from N5.690 billion. Unfortunately, finance costs skyrocketed to N392.832 billion in 2024 from N233.503 billion in 2023.
The company posted hefty loss before tax of N221.588 billion in 2024, a significant jump of 113% when compared with N104.025 billion pre-tax loss posted in 2023.
Commenting on the results, Mr. Wassim Elhusseini, CEO/Managing Director of Nestlé Nigeria PLC, said, “Our 2024 results demonstrate the resilience of our brands and teams and underscore our strong fundamentals in a challenging business environment.
“The impressive 75.2% revenue growth for the year as well as 35.6% improvement of our operating profit to 167.9 billion Naira reflect the robustness of our operating performance. Our net profit and equity were impacted by high finance costs associated with the revaluation of the company’s foreign currency obligations, due to an unprecedented devaluation of the Naira.”
“I am very pleased to state that our Q4 2024 standalone results mark a return to profitability with a net profit of Naira 19.7 billion, against a loss of 36.4 billion Naira in Q4 2023.
“Our investments of 132 billion Naira in our operations since 2023, including Naira 72 billion in 2024, are strategically aligned to enhance our market position and meet the consumer demand. We also expanded our workforce by 8% to support the growth across our portfolio.
“We extend our gratitude to our employees whose decisive actions contributed to our results. We also thank our partners for their vital contributions during these challenging times.”
In the fourth quarter of 2024, Nestlé Nigeria PLC achieved a net profit after tax of 19.7 billion Naira compared to a loss of -36.4 billion Naira in Q4 2023. Operating profit in the quarter increased by 77.1%, rising from 32.2 billion Naira to 56.9 billion Naira. This turnaround from loss to profitability underscores the strength of the company’s underlying fundamentals.
Since 2023, the company has invested 132 billion Naira in new capacities and technologies within its operations, including 72 billion Naira in 2024. Also in 2024, the company increased its workforce by 8%.
These investments are strategically aligned with its long-term goals to strengthen its market position and meet consumer demand. In March 2024, Nestlé Nigeria had adopted the revaluation model for its lands, buildings, plants and machinery, transitioning from historical cost accounting. This change resulted in a net revaluation gain of 150 billion Naira, reflected in the company’s Statement of Comprehensive Income, Financial Position, and Statement of Changes in Equity.
In 2024, Nestlé Nigeria balanced its operational performance with social responsibility, remaining steadfast in creating shared value as a positive force for good in society. It demonstrated its dedication to women and youth development through several initiatives. #Nestlé Nigeria Net Loss Expands by 107% to N165bn
