Nestle Nigeria’s N127.46 billion foreign exchange loss in the face of weak naira has pushed the firm to a loss after tax thereby resulting in a loss per share for its shareholders.
The firm recorded a foreign exchange loss of N127.46 billion in 9M’2023 from N1.69 billion in the same period of 2022.
As a result of the foreign exchange loss, Nestle Nigeria recorded a loss after tax of N43.07 billion in 9M’2023 from N40.15 billion in the same period of 2022 which led to a loss per share of N54.33 per share from earnings per share of N50.66 per share.
Net cash flows from operating activities increased to N53.26 billion in 9M’2023 from N4.34 billion in the same period of 2022 which implies that the firm’s cash flow from its core business operations increased during the period.
The firm’s revenue increased to N396.59 billion in 9M’2023 from N333.47 billion in the same period of 2022.
Read also: Nestlé posts N49.9bn loss in H1 as finance costs spike
In the first nine months of 2023, Nestle Nigeria sold goods worth N396.1 billion in Nigeria while N488.02 million worth of goods were export sales during the period.
“Operating expenses (adjusted for depreciation) remained elevated, exacerbated by the growths of 35.98 percent and 4.97 percent year on year to N58.03 billion and N7.99 billion in 9M 2023 in its marketing and administrative expenses (adjusted for depreciation) and selling and distribution Expenses (adjusted for depreciation) respectively,” analysts at CSL Research said in a note.
The firm’s marketing and distribution expenses rose to N58.88 billion in 9M’2023 from N43.38 billion in the same period of 2022.
Administrative expenses increased to N9.7 billion in 9M’2023 from N9.03 billion in the same period of 2022.
Nestle Nigeria’s cost of sales amounted to N236.42 billion in 9M’2023 from N216.19 billion in the similar period of 2022.
“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 percent year on year to N236.42 billion in 9M’2023 from N216.19 billion in 9M’2022,” analysts at CSL Research stated.
Net finance cost increased to N148.24 billion in 9M’2023 from N6.49 billion in the same period of 2022.
Read also: Investors gain N167bn as Nestle, others help market defy rate hike
The firm’s net cash flows used in investing activities increased to N26.65 billion in 9M’2023 from N12.02 billion in the same period of 2022.
Net cash flows provided by financing activities amounted to N7.59 billion in 9M’2023 from N12.46 billion in the same period of 2022.
Interest income on securities and bank deposits grew to N3.7 billion in 9M’2023 from N1.98 billion in the same period of 2022.
The firm’s cash and cash equivalents increased to N152.27 billion in 9M’2023 from N107.13 billion in the same period of 2022.
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Nestle Nigeria appointed Gbenga Oyebode as the new chairman of its board of directors. The appointment follows the retirement of David Ifezulike as the chairman of the board of the company with effect from May 18, 2023.
In 2022, Nestle Nigeria launched her employee plastics collection scheme which inspires staff to protect the environment and combat plastic pollution by inculcating the habit of sorting wastes at source and recycling for sustainable environmental management.
Through the scheme, employees return all plastic materials, not limited to the company’s brands, and earn points culminating in exciting rewards and management recognitions.
Nestle Nigeria is a publicly listed food and beverage speciality company headquartered in Lagos. It is mostly owned by a holding company based in Switzerland and has ties to the company Tolaram Group. The company was founded in 1961 and conducted trading under the name of Nestle Products Nigeria Limited.
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