Despite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS

Must Read

List of First Bank of Nigeria Sort Codes in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...
- Advertisement -

Nestle Nigeria published its full-year (FY) 2019 earnings report with topline rising by 6.67% to settle at N284 billion (underperforming our FY 2019 estimate: N296 billion) vs N266 billion the corresponding period of 2018.

Despite recent border closure, we noted growth in export by 43.6%, largely due to increased export to Ghana and Burkina Faso. Also, the food segment continues to contribute the largest chunk to top-line settling at 62% while Beverages contributed the residual 38%.

Furthermore, we witnessed swifter growth in beverages (10%) than the food segment (4.7%). Moving on, we noted a marginal spike of 3.08% in operating cost, majorly due to rise in distribution expense (following persistent dilapidated road network and road gridlock), raw material and consumables, and other personal expense.

Nonetheless, operating profit returned stronger to N72.06 billion (FY’19 estimate: N72.688) vs N60.64 billion FY 2018, representing a growth of 18.83%. Finance income and expenses shrank for the period when compared to 2018 by 22.6% and 13.04% respectively. Profit before tax spurred in the period under review by 19.03% to N71.12 billion (FY’19 estimate N71.34 billion) vs N59.75 billion recorded in FY 2018.

Read Also:  HP Unveils Hi-Tech Hardware, Accessories for Gamers
- Advertisement -

Consequently, NESTLE recorded a profit after tax (PAT) of N45.56 billion for the year against N50.22 billion in FY 2018. This is lower than our FY2019 estimate of N58.44 billion, majorly due to our lower income tax expense estimate. NESTLE declared a final dividend of N45.00 per share, representing a 4.42% dividend yield.

Our blended model currently posits a fair value estimate of N1,370.8 for NESTLE, hence, We recommend a BUY at the current price level.

Despite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS - Brand Spur
Source: NSE, Greenwich Research

Greenwich Research

- Advertisement -
Despite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS - Brand SpurDespite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS - Brand Spur
- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Despite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS - Brand SpurDespite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS - Brand Spur

Latest News

Europa League: Arsenal in Tough Spot After Home Draw

UEFA Europa League quarter-finals return leg will be played on Thursday evening at 8 pm live on StarTimes. Aubameyang’s Arsenal...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -Despite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS - Brand SpurDespite Marginal Uptick in PAT, NESTLE Pay-Out 78.08% OF EPS - Brand Spur