Nestlé posts N164.6bn net loss for 2024, on FX losses, interest rate

Nestle Nigeria posted a net loss of N164.6 billion for the 2024 financial year. This marks a 107 percent decline from the N79.5 billion loss recorded in 2023.

Despite posting record revenue of N958.8 billion, a 48 percent jump in Nestle’s operating expenses to N139.4 billion from 2023’s 94.3 billion. This resulted in an operating profit of N167.9 billion. In 2024, the group’s operating margin was 17.5 percent, a significant decline from 2023’s 22.6 percent.

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A combination of heightened interest rates in Nigeria plus Naira’s devaluation in 2024 led to a net finance cost of N389.5 billion. This marks a 71 percent appreciation from 2023’s N227.8 billion.

Details of the result

Nestle’s 2024 revenue was N958.8 billion, marking a 75 percent growth from 2023’s N547.1 billion. The cost of sales jumped by 98 percent to N652.5 billion, from 2023’s N329.9 billion. Leading to a gross profit of N306.4 billion, marking a 41 percent growth from the previous year’s N217.2 billion. The company’s gross margin was 32 percent for 2024, a decline from 2023’s gross margin of 40 percent.

The contributory factors to its net finance costs were interest expenses which surged to N102.1 billion. This marks a 166 percent jump from 2023’s N38.4 billion. Its net FX losses also surged to N290.7 billion, however, only N57.6 billion of that sum was realised.

Nestle’s loss profile has worsened its net assets position to a negative N92.3 billion, from negative N78 billion as of 2023. Although its total assets grew to N858.7 billion, its current assets declined marginally by 1 percent to N358.3 billion, from N361.2 billion as of 2023.

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Its current ratio declined to 0.89 from 1.24 as of 2023, as Nestle sinks deeper into debt. The company’s total borrowings surged by 62 percent to N653.7 billion, from 402.3 billion at the end of the 2023 financial year.

In 2024, Nestle carried out a revaluation of its fixed assets, leading to a revaluation gain of N150 billion accounted for in its net assets. According to the independent revaluation carried out on February 29, the fair value of Nestle’s assets was about N305.5 billion, from the previous N91.1 billion.