Nestle Nigeria Plc, one of the largest food and beverage companies in Nigeria, recorded an after-tax loss of N176.9 billion in the first half of 2024 driven by naira devaluation.
The firm’s loss widened to N176.9 billion in the first half of 2024 from N49.9 billion in the same period of 2023.
“The devaluation of naira led to the revaluation of our foreign currency obligations and had an adverse impact on the profit after tax resulting in a net loss of N176.9 billion for the first half of the year,” Nestle Nigeria said in a statement.
The firm’s cost of sales increased to N279.7 billion from N154.4 billion during the period reviewed.
Nestle Nigeria’s revenue grew to N406.9 billion from N261.8 billion.
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“The results from the first half of 2024 reflect a clear growth momentum despite continued challenges in the business environment. Particularly noteworthy is our second quarter performance with a 67 percent increase in sales year-on-year, underscoring the strength
of our brands and the trust our consumers place in us,” Wassim Elhusseini, the CEO/MD of Nestle Nigeria PLC said in a statement.
“Delivering these results has involved optimising operational efficiencies and, more importantly, the hard work and dedication of our employees who have been crucial to this success. We also appreciate the unwavering support of our business partners and shareholders.
“We are confident in our ability to navigate the current challenges to deliver long-term value to our shareholders while contributing positively to our communities. Our commitment to excellence and innovation will continue to guide us as we strive to meet
and exceed the expectations of our stakeholders,” he stated.
Analysts at Cordros Securities said in a statement that like peers in the industry, NESTLE’s topline performance remained strong in Q2 2024, but the gains were offset by increased costs.
“For the rest of the year, we anticipate continued topline growth driven by price increases across product categories, the launch of innovative and affordable products, and enhanced distribution reach, which should boost volumes,” they said.
“On the higher costs, the company plans to reduce production costs through energy efficiency measures and by substituting imported inputs with local content. However, despite these efforts, we expect elevated cost pressures and foreign exchange losses already incurred to impact NESTLE’s 2024 full year earnings,” Cordros Securities analysts said.
During the period between April till June, 2024, Nestlé Nigeria PLC saw its sales grow 67 percent to N223.4 billion from N89.7 billion.
“Further, the devaluation of Naira led to the revaluation of our foreign currency obligations and had an adverse impact on the profit after tax resulting in a net loss of N34.2 billion versus N66.1 billion in Apr-Jun 2023,” Nestle Nigeria said.
Nestlé Nigeria is a publicly listed food and beverage specialty company headquartered in Lagos. The company was founded in 1961.
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