Nestle Nig Plc has released its FY 2021 results revealing a profit of N40 billion, representing a marginal 2% increase from the prior year as revenue grew by 23%.
The year in review witnessed a persistent increase in prices of goods and services, thereby resulting in inflationary pressures that affected both consumers and producers.
Although the company increased sales on the back of double-digit food inflation, profit was greatly subdued by inefficient cost management practices as production costs increased by a whopping 31% y-o-y.
Key highlights
- A cursory view of the result shows that the company’s profit was driven by significant sales of the company’s reportable segments, that is, Food and Beverages. Both segments delivered a revenue of N352 billion in the full-year period compared to N287 billion in the same period of 2020.
- Revenue growth from the Food segment, was at 21% year on year, generating a total of N208 billion. While revenue from sale of beverages raked in N144 billion, representing 24% growth Y-o-Y.
- The company’s revenue is also broken down into revenue from Nigeria and Exports. Nigerian sales made N347 billion during the period, while exports grew slightly to generate N5.29 billion. In addition, the company also made money from interest on investment in government securities and commercial papers.
- Nestle Nig Plc full-year revenue performance was subjugated by high costs of raw materials and consumables, which also affected profit as a trickled down effect.
- The company’s revenue was also impacted by border closure, rising international commodity prices, double-digit food inflation, and volatility in the FX markets. Although, marketing and distribution expenses increased by roughly 10%, during the period.
- A further look at the financial results showed that the company’s long-term borrowings grew to N76 billion. Nestle’s total assets are now at N310 billion, net assets declined 27.03% to N21.38 billion.
Nestle Nigeria Plc has declared a dividend of N47.96 billion for FY 2021, a 14% drop from N55.49 billion in 2020. Earnings per share for the period was at N50.51 and the company is set to pay N25.50 per share as final dividend to its shareholders.
The company last traded at N1,435.00 per share and has declined by 7.81% from year-to-date.
Click here to subscribe to Nairametrics Stock Select Newsletter.
