Nestle Nigeria Plc, one of the largest food and beverage companies in Africa, recorded its first quarter loss for the first time in at least 12 years, data compiled by BusinessDay shows.
In the firm’s latest financial statement, it reported an after-tax loss of N142.7 billion in the first quarter of this year from a profit of N16.2 billion in the same period of 2023.
“Further devaluation of the naira in January till March 2024 led to the revaluation of our foreign currency obligations which had an adverse impact on the Profit after Tax resulting in a net loss of N142.7 billion for the quarter,” the company said in a statement.
It said the board of directors has approved a change in the measurement of land, building, plant, and machinery from the historical cost model to the revaluation model with effect from March 16, 2024.
“Accordingly, from this quarter, the company has adopted the revaluation model for land, building, plant, and machinery at fair value less accumulated depreciation and impairment losses.
“Going forward, the revaluation of these assets will be performed every three years through an independent certified valuer to ensure that the carrying amount of the assets does not differ materially from its fair value,” it said.
Nestle Nigeria said furthermore, the assets which are under construction such as Capital Work in Progress will also follow the revaluation model at the time of the capitalisation.
Revenue increased to N183.5 billion in the first quarter of 2024 from N127.9 billion. Impairment of financial assets grew to N122.3 million from N38.8 million.
Finance income grew marginally to N1.76 billion from N1.59 billion. Finance costs surged to N218.8 billion from N5.34 billion.
Wassim Elhusseini, CEO/MD of Nestle Nigeria Plc, while commenting on the results said, “Our first quarter sales reflect a positive growth momentum despite a challenging business environment.
“Looking ahead into the rest of 2024, our focus remains on optimising our operations to ensure the availability and accessibility of high-quality food and beverages for our loyal consumers.
“We will continue to invest in efforts that help build thriving communities and deliver long-term value to our stakeholders. This includes enhancing the capabilities of our people and implementing innovative marketing initiatives to drive sustainable growth and maintain our competitive edge in the market.
“With our strong foundation and commitment to delighting our consumers, I am confident in our ability to deliver long-term value to our shareholders while creating value for our communities,” Elhusseini stated.
