Nestlé Nigeria bounces back with N30bn profit in Q1 on revenue growth

Nestlé Nigeria Plc posted a strong recovery in the first quarter of 2025, returning to profitability with a profit after tax of N30.2 billion, a significant reversal from a loss of N142.7 billion in the same period last year.

The result reflects a solid rebound driven by strong revenue growth, improved operating margins, and reduced finance costs.

Revenue jumped by 61 percent to N294.9 billion, up from N183.5 billion in Q1 2024, driven by strong demand across its product categories including Maggi, Milo, Golden Morn, and Nescafé.

Cost of sales increased by 30 percent to N175.2 billion, but gross profit still surged 144 percent to N119.7 billion, a testament to improved cost management and pricing efficiency.

Operating profit climbed by 254 percent to N74.1 billion, up from N20.9 billion a year earlier, reflecting efficiency gains in manufacturing and distribution.

The company’s profit before tax stood at N51.2 billion, compared to a loss of N196.1 billion in Q1 2024, while net finance costs dropped by 89 percent, from N217 billion to N23 billion, due to reduced forex losses and lower interest expenses.

“This performance reflects the company’s operational discipline, innovation, and resilience in a challenging economic environment,” said Wassim Elhusseini, Nestlé Nigeria’s managing director. “We are focused on driving growth sustainably, creating shared value, and delivering long-term shareholder value.”

A turnaround backed by fundamentals

Nestlé’s return to profitability is significant not only in absolute terms but in its structural underpinnings.

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The company’s gross profit margin rose to 40.6 percent in Q1 2025 from 26.7 percent in the prior year, an indication of better pricing strategies, reduced forex losses, and stronger volume performance.

Operating margin improved to 25.1 percent, up from 11.4 percent in Q1 2024, while net profit margin closed the quarter at 10.2 percent, a sharp reversal from the -77.8 percent recorded last year.

This performance is particularly notable considering Nigeria’s economic backdrop, marked by inflation at over 24 percent and a renewed pressure on the naira. Nestlé’s ability to withstand these pressures points to its pricing power, strong local sourcing strategy, and brand loyalty.

The company also improved its equity position by N30 billion in Q1, giving investors more confidence in its balance sheet stability after last year’s revaluation and impairments.

Investor implications

Nestlé Nigeria’s performance signals a solid turnaround for long-term investors. The results place the company back in the black, following a turbulent 2024 marked by exchange losses and valuation-related impairments.

With a profit after tax of N30.2 billion, the company is already over 50 percent of its 2023 full-year profit (N49.9 billion), setting a strong foundation for a bullish 2025 outlook.

Analysts say the Q1 result could prompt an upward revision in earnings forecasts and potential mid-year dividend expectations if the trend is sustained.

However, Nestlé still faces headwinds from input inflation, exchange rate volatility, and logistics costs. The company’s ability to continue margin improvement and sustain revenue growth will be critical in the quarters ahead.

Wasiu Alli

Wasiu Alli is a business, economics cum data journalist with strong expertise covering macro trends, capital markets, government policies, corporate earnings and comparative economics analysis. Alli turns raw data into trends that not only tells compelling stories but nudges investors to make valued and informed decisions. He’s an alumnus of Lagos State University and trained at Lagos Business School. He formerly heads the Companies and Markets desk at BusinessDay where he writes and supervises the production of well researched articles on earnings updates, corporate sectoral comparisons, market intelligence as well as interviews with C-suite executives.