Nestlé Nigeria Plc experienced a 107% increase in net loss for 2024, reaching N164.595 billion, despite a 75% rise in revenue to N958.814 billion. Rising costs of sales and high finance expenses due to inflation and borrowing rates heavily impacted profits. The company did, however, return to profitability in Q4 2024, posting a net profit of N19.7 billion. Strategic investments were made to enhance capacity and operations.
Nestlé Nigeria Plc has reported a substantial increase in its net loss, which rose by 107% to N164.595 billion for the year 2024, compared to N79.473 billion in 2023. This growth in loss is attributed to ongoing challenges in the consumer sector, despite the company benefiting from significant tax credits. Notably, while revenue surged by 75% to N958.814 billion, costs of sales escalated even more rapidly, increasing by 97.74% to N652.459 billion, reflecting the adverse effects of inflation and rising input costs in Nigeria’s economic climate.
The financial troubles were compounded by higher borrowing rates and a weak local currency, leading to a sharp rise in net finance costs. Specifically, interest expenses jumped to N392.832 billion in 2024 from N233.503 billion in the previous year. Additionally, finance income dropped to N3.367 billion from N5.690 billion, contributing to the overall loss before tax, which amounted to N221.588 billion, marking a 113% increase from N104.025 billion in 2023.
Mr. Wassim Elhusseini, the CEO and Managing Director of Nestlé Nigeria PLC, commented on the results, highlighting both the resilience of the company’s brands and the operational challenges faced. He noted that despite difficulties, the company achieved a remarkable 75.2% revenue growth and a 35.6% improvement in operating profits for the year. Elhusseini emphasized the impact of high financing costs tied to foreign currency obligations due to Naira devaluation and announced a return to profitability in the fourth quarter of 2024, with net profits of N19.7 billion.
In Q4 2024, Nestlé Nigeria posted a notable turnaround, achieving a net profit after tax of N19.7 billion compared to a loss of N36.4 billion in Q4 2023, and a 77.1% increase in operating profit from N32.2 billion to N56.9 billion. This positive shift reinforces the robustness of the company’s fundamentals. Meanwhile, the company has invested a total of 132 billion Naira since 2023 to enhance capacities and technologies, with 72 billion Naira allocated in 2024 alone. Additionally, an 8% increase in workforce has been implemented to support this growth.
In March 2024, Nestlé Nigeria adopted a revaluation model for its assets, resulting in a net gain of 150 billion Naira, which will be reflected across its financial statements. Throughout 2024, the company has focused on balancing operational performance with social responsibility, demonstrating its commitment to creating value in society through initiatives aimed at women’s and youth development. The strategic investments align with the company’s long-term objectives to solidify its market presence and address consumer needs.
In conclusion, Nestlé Nigeria’s financial report for 2024 reveals a stark increase in net loss, exacerbated by inflation and rising input costs. Despite these challenges, the company has achieved significant revenue growth and a positive Q4 performance, attributing this success to strategic investments and operational resilience. Mr. Elhusseini’s insights reflect a commitment to navigating the economic landscape while maintaining a focus on social responsibility and market demands.
Original Source: dmarketforces.com
