Nestlé Nigeria reported a net loss of N164.6 billion in 2024, marking a 107% increase from 2023 due to high sales costs and inflation. Revenue grew 75% to N958.8 billion, but finance costs rose sharply, impacting net profits. The company returned to profitability in Q4 2024 with N19.7 billion and made significant investments aimed at fortifying its market position while maintaining social responsibility initiatives.
Nestlé Nigeria Plc reported a substantial net loss of N164.6 billion in 2024, reflecting a 107% increase from N79.5 billion the previous year. This marked decline was attributed to enduring pressures within the consumer sectors despite the company benefiting from significant tax credits.
Revenue surged by 75%, reaching N958.8 billion in 2024, up from N547.1 billion in 2023. However, costs of sales escalated significantly by 97.7%, totaling N652.5 billion. This disparity in revenue and sales cost growth pressured profit margins due to Nigeria’s high inflation impacting input costs.
Despite strong revenue growth, Nestlé’s net finance costs soared as interest rates on borrowings increased sharply. Finance expenses jumped to N392.8 billion from N233.5 billion, while finance income declined to N3.4 billion from N5.7 billion, resulting in a pre-tax loss of N221.6 billion, reflecting a 113% increase over the previous year’s loss.
CEO Wassim Elhusseini highlighted the year’s results as demonstrating the resilience of the brand, emphasizing the notable 75.2% revenue growth and a 35.6% increase in operating profit to N167.9 billion. He also noted the adverse effects of high finance costs related to currency obligation revaluations due to the naira’s unprecedented devaluation.
In Q4 2024, the company pivoted back to profitability with a post-tax net profit of N19.7 billion, in contrast to a loss of N36.4 billion in Q4 2023. This success was driven by a 77.1% rise in operating profit, showcasing the robustness of its operational performance amid previous downturns.
Since 2023, Nestlé invested N132 billion in enhancing operations, including N72 billion in 2024. These strategic investments are aimed at solidifying market standing and expanding workforce by 8% to bolster growth across its product portfolio. The revaluation of assets in March 2024 yielded a notable net gain of N150 billion, enhancing the financial statements.
Nestlé Nigeria has balanced its business results with social responsibility, maintaining a commitment to create shared value. It has actively pursued initiatives focused on the development of women and youth, emphasizing its role as a socially responsible corporate entity amid economic challenges.
Nestlé Nigeria’s financial results for 2024 highlight significant challenges with a net loss exacerbated by rising costs and high inflation impacting the operational environment. The company’s ability to achieve considerable revenue growth and a return to profitability in Q4 indicates resilience and strategic investments aimed at future stability. Their commitment to social responsibility further underscores their proactive approach amidst a challenging business landscape.
Original Source: dmarketforces.com
