A 265% year-over-year decline from the N69.1 billion pre-tax loss reported in H1 2023, Nestlé Nigeria Plc reported a pre-tax loss of N252.5 billion for the 2024 half-year.
The business reported N407 billion in revenue during that time, a 55% increase over the N261.8 billion reported in H1 2023.
While its gross profit increased from N107 billion to N127.3 billion, a 19% year-over-year increase.
The company reported a net loss of N176.9 billion for the period, which is a 254% drop from the N49 billion net loss reported in H1 2023.
In contrast to the N118.5 billion reported in H1 2023, Nestle experienced a net foreign exchange loss of N263.7 billion during the 2024 half-year.
H1 2024 Over H1 2023 Key Highlight
- Revenue: N407 billion, +55% YoY
- Cost of sales: N279 billion, +81% YoY
- Gross profit: N127.3 billion, +19% YoY
- Operating expenses: N64.2 billion, +38% YoY
- Operating profit: N63.1 billion, +4& YoY
- Operating margin: 15%, -8 percentage-point YoY
- Net finance cost: N315.6 billion, +143% YoY
- (Loss)/Profit before tax: (N252.3 billion), -265% YoY
- (Loss)/Profit for the period: N176.9 billion, -254% YoY
- Earnings per share: (N223.19), -254% YoY
- Total assets: N869 billion, +49% YTD
After further analysis, Nestlé reported revenue of N223.5 billion for the second quarter of 2023, a 67% increase in revenue from the N133.8 billion reported in the same quarter the previous year. In addition, the company’s loss before tax for the second quarter came in at N56.4 billion, up 40% from the N94 billion loss reported in the same quarter of 2023.
Also read: https://brandspurng.com/2024/07/30/presco-plc-witnesses-a-pre-tax-profit-of-n20-781bn-q2-2024/
Continuing, its financial outcomes during the second quarter of the year demonstrated the stability of the exchange rate. After reporting N132.4 billion in Q2 2023, the financing costs dropped to over N99.3 billion, a 25% year-over-year decline.
Nigeria was the source of the majority of Nestlé Nigeria’s income. But the group’s export income was N2.9 billion, jumping 656% year over year from N377 million in H1 2023.
BrandSpur business and economy news holds that the revaluation of the company’s property, plant, and equipment resulted in a N150 billion excess that propelled the 49% increase in the company’s assets in 2024.
Since the conclusion of the 2023 fiscal year, Nestle has had negative equity; however, at the end of the 2024 fiscal year, the negative equity had grown by 34%, from N78 billion at the end of FYE 2023 to N104.9 billion. As the business’s retained losses dropped from N78.6 billion to N255.5 billion.
Nestlé’s Financial Liabilities
The corporation was impacted by the high-interest environment in addition to net foreign exchange losses brought on by the Naira’s devaluation. From N14 billion in H1 2023 to N54.4 billion in H1 2024, its interest expense climbed by 290% year over year.
With some of Nestle’s foreign exchange-denominated borrowings having a long maturation period, of its N263 billion net foreign exchange loss on financing, about N31.9 billion was realised and N231.8 billion was unrealised.
The company’s debt profile showed this unrealised loss, with loans and borrowing rising to N653.9 billion, a 62.5% increase from N402.3 billion as of FYE 2023.
Nestle had a loan profile of over N402.3 billion as of FYE 2023. But this year, in addition to repaying N77.3 billion, the corporation took out a N12.3 billion intercompany loan and a N57 billion fresh bank credit.
Nestlé Nigeria has $449 million in net foreign exchange exposure, of which $426.3 million is from an intercompany loan. The corporation had an intercompany loan of $402.5 million as of the end of FYE 2023.
