Nestle Nigeria has reported a loss after tax for the 9-month period ending in 2023 due to a significant foreign exchange loss of N127.46 billion amid the weakened state of the naira. The forex loss resulted in a loss per share for shareholders. Despite challenges, the company’s revenue increased to N396.59 billion in the mentioned period. Nestle Nigeria’s cost of sales also rose, influenced by inflation and foreign exchange pressures. The firm’s net cash flows from operating activities increased, and it appointed Gbenga Oyebode as the new chairman of its board of directors.
Key Points:
- Forex Loss Impact on Financials:
- Nestle Nigeria recorded a foreign exchange loss of N127.46 billion in the 9-month period of 2023, significantly higher than the N1.69 billion recorded in the same period in 2022. This led to a loss after tax of N43.07 billion and a loss per share of N54.33.
- Revenue Increase:
- Despite challenges, Nestle Nigeria’s revenue increased to N396.59 billion in the first nine months of 2023 from N333.47 billion in the same period of 2022.
- Operating Expenses and Cost of Sales:
- Operating expenses, particularly in marketing and distribution, rose to N58.88 billion, and administrative expenses increased to N9.7 billion. The cost of sales, influenced by inflation and forex pressures, amounted to N236.42 billion.
- Net Cash Flows and Financing Activities:
- Net cash flows from operating activities increased to N53.26 billion in 9M’2023. Net cash flows used in investing activities rose to N26.65 billion, while net cash flows provided by financing activities amounted to N7.59 billion.
- Finance Cost and Cash Position:
- Net finance cost increased to N148.24 billion. The firm’s cash and cash equivalents increased to N152.27 billion in 9M’2023 from N107.13 billion in the same period of 2022.
- Leadership Changes:
- Gbenga Oyebode was appointed as the new chairman of Nestle Nigeria’s board of directors, succeeding David Ifezulike.
Conclusion:
Nestle Nigeria’s financial performance in the 9-month period of 2023 reflects challenges, particularly a significant forex loss, which contributed to a loss after tax. Despite these difficulties, the company saw an increase in revenue, and its operational cash flows improved. Leadership changes and initiatives, such as the employee plastics collection scheme, highlight the company’s commitment to sustainable practices and environmental responsibility.
