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Nestle Nigeria Plc has reported a pre-tax loss of N255.38 billion in nine months of 2024, driven largely by soaring finance costs.
This marks a sharp increase in losses, up by N198.73 billion compared to the same period in 2023 when pre-tax losses stood at N56.65 billion.
The company’s unaudited financial statement, published on the Nigerian Exchange Group (NGX), attributes a significant portion of the loss to the impact of foreign currency translation, with a net exchange loss on foreign currency-denominated balances reaching N285.29 billion. This is more than double the N127.45 billion loss recorded in the corresponding period of 2023.
Interest expenses on financial liabilities also surged by 188 per cent, rising from N29.07 billion in the first nine months of 2023 to N83.86 billion in 2024. Nestle Nigeria’s cost of raw materials more than doubled, from N116.83 billion to N251.12 billion, while direct overhead costs totalled N108.51 billion, and direct labour costs amounted to N36.22 billion—an increase of 350 per cent year-on-year.
The company’s net finance cost skyrocketed by 147 per cent, from N148.24 billion to N366.22 billion, placing further pressure on its bottom line. Despite revenue growth of 68 per cent to N665.28 billion, Nestle Nigeria’s cost of sales jumped by 94 per cent, reaching N458.97 billion. Gross profit for the period was N206.31 billion, reflecting a 29 per cent increase, but operating profit only rose by 21 per cent, to N110.84 billion, as finance costs took a heavy toll.
Marketing and distribution expenses grew by 25 per cent to N73.39 billion, while administrative expenses saw a dramatic 132 per cent increase, totalling N22.54 billion. Ultimately, the company posted a pre-tax loss of N255.38 billion—a 350 per cent increase compared to the previous year. However, an income tax credit of N71.11 billion somewhat cushioned the blow, leading to a loss after tax of N184.27 billion, up 328 per cent.
This resulted in a basic loss per share of -N232.47k, representing a 332 per cent decline.
For the third quarter alone (July-September 2024), revenue nearly doubled from N134.82 billion in Q3 2023 to N258.31 billion. However, rising costs continued to erode profitability. Cost of sales in Q3 2024 surged from N81.98 billion to N179.31 billion, while net finance costs ballooned by 160 per cent, from N18.33 billion to N50.62 billion. This led to an after-tax loss of N7.35 billion, a sharp reversal from the after-tax profit of N6.91 billion recorded in Q3 2023.
Nestle Nigeria Plc remains in the red despite a revenue boost, primarily due to the heavy burden of finance costs and foreign exchange challenges.