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Nestle Nigeria’s net loss widened by 328% year on year to N184 billion from N43.068 billion, details from its unaudited financials for nine months of financial 2024 revealed.
In its unaudited financial results for the nine months of 2024, the consumer goods company reported foreign exchange losses of N285.29 billion. From N396.592 billion in 9 months of 2023, the company experienced a substantial increase in revenue, which rose by 67.8% year on year to N665.29 billion.
The improved topline was driven by 66.8% rise in domestic sales and an impressive 861.7% increase in exports, as details from the earnings release showed.
Analysts noted that consumer company revenue surged as a result of volume growth, price adjustments, and the introduction of new products like Maggi signature jollof, Maggi soya chunks, Nido milk and soya, Milo 3-in-1, and Cerelac rice.
Conversely, the cost of sales surged by 94.1% year on year to N458.978 billion from N236.421 billion in the comparable period in 2023. The company witnessed a significant increase in raw material costs due to inflationary pressures.
Nestle Nigeria Plc gross profit margin increased by 28.8% year on year to settle at N206.312 billion at the end of 9m-2024 from N160.171 billion in the equivalent period in 2023. Due to a significant increase in the cost profile, the company’s gross margin decreased to 31.0% from 40.4% in the same period last year.
Operating expenses also increased by 39.8%, primarily due to higher marketing and administrative spending. Total operating profit was 21% more than the equivalent period in 2023.
Details showed the operating profit printed at N110.844 billion at the end of the period, from N91.586 billion in the prior year. Consequently, the operating profit margin fell to 16.7% from 23.1% in the prior year. The momentum was doused entirely by a significant increase in net finance costs.
Net finance costs for Nestle jumped by 147.0% year on year to N366.23 billion in 9M 2024, up from N148.24 billion in 9M 2023. A breakdown of this number indicates that finance income was N2.93 billion, significantly lower than N8.29 billion in 9M 2023.
This was driven by a reduced volume of near-cash financial instruments and time deposits in the period. On the flip side, finance cost grew by 135.8% year on year to N369.16 billion in 9M 2024, up from N156.53 billion in 9M 2023.
This increase was primarily due to net exchange loss on the translation of foreign currency denominated balances, which increased to N285.29 billion from N127.46 billion in the previous year.
There was also a 188.5% rise in interest expense to N83.87 billion in the period from N29.07 billion for 9M 2023 due to currency devaluation impact on increased intercompany loans in the period.
Notably, unrealized exchange loss for the company increased significantly from N173.93 billion in 2023 to N251.59 billion in 9M 2024.
On a positive note, the company reported a tax credit of N71.11 billion due to the reversal of temporary differences in deferred taxes. Overall, Nestle reported a negative PAT of N184.27 billion. #Nestle Nigeria Net Loss Increases by 328% to N184bn