• Friday, December 08, 2023
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Four things to note from Nestle’s latest financials


Nestle Nigeria, a global food and beverage powerhouse, recently its financials for the first nine months of 2023 with mixed results as Nigeria’s economic situation takes a toll on its books.

Data sourced from the firm’s financials showed the firm’s export revenue dropped to N488 million, down from N2.89 billion in the same period of 2022.

However, there was an 18.9 percent increase in their total revenue, which reached N396.6 billion, up from N333.5 billion in the same period of 2022.

Read also: Nestlé posts N49.9bn loss in H1 as finance costs spike

Nestle’s food products and beverage segments showed growth, with a 27.0 percent increase to N254.38 billion and a 6.8 percent increase to N142.21 billion in the nine months of 2023.

In the third quarter of 2023, the company’s revenue marginally increased by 0.8 percent to N134.82 billion, compared to N90.15 billion in Q3 2022.

The cost of sales increased to N236.4 billion in the nine-month period of 2023, up from N216.2 billion in the same period of 2022. This increase was attributed to inflation and FX pressures.

“Despite the company’s ability to source most of its raw materials locally, the Cost of Sales (adjusted for depreciation) yielded to inflation and FX pressures as it advanced by 9.36% y/y to N236.42bn in 9M 2023 from N216.19bn in 9M 2022,” CSL stockbrokers said in a note.

Read also: Investors gain N167bn as Nestle, others help market defy rate hike

Operating expenses also experienced growth, rising by 31 percent to N68.6 billion in the period under review from N52.4 billion recorded in the same period of 2022.

This increase was driven by an increase in marketing & administrative expenses and selling & distribution expenses, which rose by 35.98 percent and 4.97 percent respectively

Nestle’s finance income surged by 221.27 percent to N8.29 billion, driven by a net exchange gain of N4.58 billion in nine months of 2023, compared to N603.11 million in the same period of 2022.

However, the net finance cost increased to N148.24 billion, on the back of a rise in finance cost to N156.53 billion from N9.07 billion recorded in 2022, resulting from the net exchange rate difference on the company’s foreign currency-denominated balance.

Read also: Nestle’s profit drops to N16bn on rising finance cost

The consumer goods firm saw its finance Income surge by 221.27 percent to N8.29 billion from N2.58 billion driven by N4.58 billion in net exchange gain in nine months of 2023 from N603.11 million recorded in the same period of 2022.

The company recorded a loss after tax in the nine-month period, amounting to N43.06 billion, a significant shift from a profit of N40.15 billion recorded in the same period of 2022.

“Consequently, the company recorded a Loss Before Tax of N56.66bn in 9M 2023 whilst its Loss After Tax came in at N43.07bn in 9M 2023 due to the income tax credit of N13.59bn,” CSL added in their note.

Read also: Nestlé Nigeria grows full year profit by 22.3%

Nestle’s cash flow for the nine months can be summarized as follows: net cash from operating activities amounted to N53.3 billion, net cash used for investing activities amounted to N26.6 billion, and net cash from financing activities amounted to N7.6 billion.

Their cash and cash equivalent for the period amounted to N152.7 billion, up from N107 billion recorded in the same period of 2022.