Still basking in the euphoria of a rebound in its share price, food and beverage giant, Nestle Nigeria Plc, has released its unaudited financial statement for the first quarter (Q1) for the period ended 31 March.
Revenue for the period ended March 31, 2020, declined marginally to N70.33 billion from N70.97 billion for the corresponding period in 2019. This represents a 0.9% decrease.
The decline in revenue rose on the back of pressure on the company’s food business segment where is sells Maggi, which was down 8.7percent year-on-year to N41.5bn in Q1 2020. The decline in the demand of Maggi came as restaurants were closed and fewer social events due to lockdown measures.
Conversely, the beverage business segment where it sells Milo beverage drink, recorded a massive 13.1percent year-onyear growth to N28.8bn in Q1 2020. This growth was driven by panic buying activities ahead of the lockdown.
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Cost of sales for the first quarter of 2020 declined 2.1percent to N38.67 billion, as against N39.50 billion that was recorded for the corresponding period in 2019.
Gross profit was higher at 1.1percent year on year to N33.1bn in Q1 2020 from N32.7bn in Q1 2019.
Profit after tax for Q1 2020 stood at N11.20 billion, as against N12.85 billion that was achieved for Q1 2019. This shows a 12.84% decline.
The makers of Nescafe and Golden Morn recorded a Net Finance Cost of N82.7m in Q1 2020 compared with Net Finance Income of N34.0m in Q1 2019. This was due to a significant decline in Finance Income (down 33.5% y/y to N335.2m) because of the lower yield environment prevalent in Q1 2020.
Marketing and distribution expenses surged to N11.04billion from N10.37 billion also administrative expenses increased to N3.07billion from N2.01 billion in Q1 2019.
Earnings per Share declined to N14.12/s in Q1 2020 from N16.21/s in Q1 2019. On a q/q basis, Net Income was up 24.5% due to lower Operating expenses and lower Effective tax rate relative to Q4 2019.
