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Stock Market

Nestle Nigeria’s parent company to earn N32 billion in dividend from subsidiary

Nestlé S.A, the parent company of Nestlé Nigeria looks set to earn a mega dividend.

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The parent company of Nestlé Nigeria Plc, Nestlé S.A, is set to earn a whopping sum of N32 billion in dividend for the financial year ended December 2020.

The multinational food and drink processing conglomerate corporation, headquartered in Switzerland is the single majority shareholder of Nestlé Nigeria Plc, with 527,080,970 units of the total issued shares of its subsidiary.

This puts the ownership stake of the Swiss multinational at 66.5%, ahead of Stanbic IBTC Nominees Limited with 6.28% ownership stake.

Recall that the Board of Directors of Nestlé Nigeria in a statement released via the Nigerian Stock Exchange proposed a final dividend of N35.5 per share. This puts the total dividend payout of the company at N60.5 per share for the financial year 2020 (interim: N25.0).

READ: Nestle’s parent company increases stakes in Nestle Nigeria in August

When converted to dollars, the dividend amounts to about $78 million based on an exchange rate of N410/$1.

This proposal reflects the resilience of Nestlé despite the disruption occasioned by the pandemic. As the FMCG company was able to maintain its tradition of dividend payment to shareholders in 2020, despite taking a major shock in its profit during the year (-14%).

  • Nestlé delivered a consistent result in terms of revenue, amidst the ongoing COVID-19 pandemic which disrupted supply chains globally.
  • The revenue of the FMCG company increased by 1% in 2020 (N287 billion), compared to FY’19 figures (N284 billion).
  • However, the increase in the prices of materials, foreign exchange restrictions, and a spike in finance costs placed pressure on the company’s profitability in 2020.
  • At the back of these pressures, Nestlé’s PAT declined by 14% in 2020 (N39.2 billion) compared to FY’19 figures (N45.7 billion).

READ: Nestle Nigeria Plc records 0.66% increase in export sales boost revenues

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What you should know

Nestlé S.A is one of the largest food companies in the world in terms of revenue. The Switzerland-based consumer goods behemoth is the parent company of Nestlé Nigeria PLC – a leading food and beverage company in Africa.

Nestlé has grown its operation in Nigeria, as well as its presence in the Central and West Africa region over the years.
Its factory in Nigeria has grown from one – with the establishment of the Agbara Manufacturing Complex which commenced operation in 1981 – to three in recent times, following the inauguration of the Flowergate factory, a factory initially dedicated to the production of MAGGI products, and the set-up of the Abaji factory complex in 2016.

Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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Markets

JAPAULGOLD, STERLNBANK surge, GUINNESS plunges  

The All-Share Index decreased by -0.29% to close at 38,601.83 from 38,712.55 index points.

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Stocks drop after the S&P 500 sets a new high

The Nigerian Stock Exchange market made another bearish run at the end of the trading session. The All-Share Index decreased by -0.29% to close at 38,601.83 from 38,712.55 index points.

  • The Nigerian Stock Exchange market value currently stands at NGN 20.26Tr. Its Year-to-Date (YTD) returns currently stands at -4.14%.
  • The market closed beneath expectation as JAPAULGOLD led 15 Gainers, and GUINNESS topped the chart of 18 Losers with a noticeable bearish movement by the NSE ASI.

Top gainers

  1. JAPAULGOLD up +8.70% to close at N0.75
  2. NAHCO up +7.39% to close at N 2.18
  3. STERLNBANK up +7.14% to close at N1.80
  4. STANBIC up +5.75% to close at N46.00
  5. CHAMS up +5.00% to close at N0.21

Top losers

  1. GUINNESS down -9.91% to close at N24.10
  2. TRIPPLEG down -9.72% to close at N0.65
  3. NCR down -9.68% to close at N2.52
  4. CHAMPION down -9.09% to close at N2.00
  5. JAIZBANK down -7.69% to close at N0.60

Outlook

Analysts’ predictions of a recovery in the market were halted by another bearish trend at the end of the trading session on Tuesday, though there is strong optimism that a recovery from the financial and consumer sectors will push the NSE-ASI back to profit.

Nairametrics advises cautious participation in the stock market in this era of growing uncertainties.

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Markets

Japaul Gold mines gold for investors, as shares return N751 million for investors in two days

Japaul Gold shares deliver 19.05% gains in two trading sessions on the floor of the NGX.

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ETF, stocks, shares, investment, equity,Gold loses some shine on hopes for COVID-19 vaccines

Japaul Gold continues to excite investors as the shares of the gold exploration company gained an additional 8.7% during today’s session on the Nigerian Stock Exchange (now NGX), to close higher at N0.75 per share.

The 8.7% increase in the company’s share price today extended the total returns to all shareholders from their investments in the company’s shares to N752 million in just two trading sessions.

These gains have seen the market capitalization of the rebranded company with a key focus on exploration increase from N3.95 billion to N4.70 billion in two days.

Data tracked on the NGX website (previously NSE), from the market close last week Friday till the close of trade today revealed that the share price of Japaul Gold and ventures surged by 19.05%, from N0.63 per share to N0.75 per share.

In case you missed it

Nairametrics reported last week that Japaul Gold took the market by surprise in the first active trading week in the month of April, as the shares of the rebranded company surged by a whopping 40%, to lift the company’s capitalization by about N1.38 billion.

  • Prior to the move up to N0.63 per share at the close of trade last week, the shares of Japaul Gold bottomed at N0.41 on the 31st of March 2021.
  • This move presented bargain hunters with the golden opportunity to benefit from the upward price swings in the company’s shares.

What you should know

  • The shares of the rebranded and restructured company with a new focus on Gold exploration as its new name suggests, rallied to a record 52-week high of N1.67 this year, on the 18th of January, 2021.
  • At the current price, shares of Japaul Gold are trading 20.97% higher than what the company’s shares sold for at the close of trading activities on the 31st of December 2021.

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