In the first nine months of 2024, Nestle Nigeria Plc recorded a pre-tax loss of N255.38 billion on the back of significant increase in finance cost.
The company in the period saw its pre-tax losses rise by a whopping N198.73 billion when compared to the same period of 2023.
This is according to Nestle Nigeria Plc unaudited financial statement for the nine months ending September 30, 2024, published on the NGX where pre-tax losses rose from N56.65 billion in 2023 to N255.38 billion in the current period.
This marks an increase of 350% over the one year period.
The company also saw its net finance cost increase by 147% from N148.24 billion to N366.22 billion during the period.
Key Highlight of the report
- Revenue- N665.28 billion, +68%
- Cost of sales- N458.97 billion, +94%
- Gross profit- N206.31 billion, +29%
- Marketing and distribution expenses- N73.39 billion, +25%
- Administrative expenses- N22.54 billion, +132%
- Operating Profit- N110.84 billion, +21%
- Finance costs- N369.15 billion, +136%
- Net Finance cost- N366.22 billion, +147%
- Pre-tax loss- N255.38 billion, +350%
- Income tax credit- N71.11 billion, +424%
- Loss after tax- N184.27 billion, +328%
- Basic Loss per share- (-N232.47k), -332%
Third Quarter performance
In the three months between July and September 2024, the company’s revenue grew from N134.82 billion to N258.31 billion. However, a significant increase in the cost of sales as well as net finance cost ensured the company was in the red during the period.
- Cost of sales in the third quarter of 2024 nearly doubled from N81.98 billion in Q3, 2023 to N179.31 billion. Also, net finance cost in Q3, 2024 soared by over 160% from N18.33 billion in 2023 to N50.62 billion in the period under review. This resulted in an after-tax loss of N7.35 billion from an after -tax profit of N6.91 billion in the Q3, 2024.
Commentary: Nestle Nigeria Plc’s significant net finance cost resulted mainly from the translation of foreign currency denominated balances which resulted in a loss of N285.29 billion. In the corresponding year of 2023, the company’s translation of net exchange loss on foreign currency denominated balances stood at N127.45 billion.
- Furthermore, interest expense on financial liabilities rose by 188% from N29.07 billion between January to September 2023 to N83.86 billion in the first nine months of 2024.
- In the period under review, Nestle Nigeria’s raw material cost soared by over 100% from N116.83 billion to N251.12 billion. The company spent N108.51 billion on direct overhead cost and N36.22 billion on direct labour costs in the first nine months of the year.
