In the first nine months of 2024, Nestle Nigeria Plc reported a pre-tax loss of N255.38 billion, driven by a substantial rise in finance costs.
Compared to the same period in 2023, the company’s pre-tax losses surged by N198.73 billion. Nestle’s unaudited financial statement for the nine months ending September 30, 2024, published on the NGX, shows pre-tax losses escalating from N56.65 billion in 2023 to N255.38 billion this year—a 350% increase year-over-year.
Additionally, the company’s net finance cost jumped 147%, rising from N148.24 billion to N366.22 billion during this period.
- Key Highlight of the report
- Revenue- N665.28 billion, +68%
- Cost of sales- N458.97 billion, +94%
- Gross profit- N206.31 billion, +29%
- Marketing and distribution expenses- N73.39 billion, +25%
- Administrative expenses- N22.54 billion, +132%
- Operating Profit- N110.84 billion, +21%
- Finance costs- N369.15 billion, +136%
- Net Finance cost- N366.22 billion, +147%
- Pre-tax loss- N255.38 billion, +350%
- Income tax credit- N71.11 billion, +424%
- Loss after tax- N184.27 billion, +328%
- Basic Loss per share- (-N232.47k), -332%
Third Quarter Performance Update
Between July and September 2024, Nestle Nigeria Plc’s revenue surged from N134.82 billion to N258.31 billion. However, sharp increases in both the cost of sales and net finance costs left the company at a loss for the period.
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In the third quarter of 2024, cost of sales nearly doubled, rising from N81.98 billion in Q3 2023 to N179.31 billion. Additionally, net finance costs skyrocketed by over 160%, increasing from N18.33 billion in 2023 to N50.62 billion in 2024. These escalated expenses led to an after-tax loss of N7.35 billion, contrasting with an after-tax profit of N6.91 billion in the same period the previous year.
A substantial portion of Nestle Nigeria Plc’s net finance costs resulted from foreign currency-denominated balance translations, causing a significant loss of N285.29 billion, compared to N127.45 billion in net exchange losses on these balances in 2023.
Interest expenses on financial liabilities also grew by 188%, climbing from N29.07 billion in the first nine months of 2023 to N83.86 billion in 2024. In the same period, the company’s raw material costs more than doubled from N116.83 billion to N251.12 billion. Additionally, Nestle incurred N108.51 billion in direct overhead costs and N36.22 billion in direct labor costs in the first nine months of the year.
(Nairametrics)
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