Nestle results first quarter results are out and shows a relatively flat quarter as earnings basically stalled. Here are highlights of the results
- Revenue rose 9% to N33.4billion compared to N30.6billion a year earlier.
- There was also growth in its Food and Beverage divisions as both experienced about 8% growth each
- Gross profit also rose 12% to N14.8billion compared to N13.2billion a year earlier
- Gross profit margin also improved 44.5% compared to 43% a year earlier
- The gains in top line revenue will be affected negatively by the 25% rise in opex. Opex grew YoY to N7.1billion (2013 Q1: N5.7billion) as rising personnel cost and depreciation took its toll during the year. Distribution expenses rose from N4.3billion same period 2013 to N5.6billion in the first three months of this yest
- This cascaded to an operating profit (without other income) of N7.7billion just 3% higher than the N7billion posted same period last year.
- Finance cost also rose 41% to N655million
- Pre-tax profit was N7billion basically unchanged from the N7billiion posted same period last year.
- Pre-tax profit was actually 4% lower YoY 2013/2012.
- It will be interesting to see if the current slow down in earnings growth is temporary. One thing is clear though, Nestle is locked in on single digit earnings growth so long as distribution cost remain stubbornly high.
