Nestle Nigeria Plc’s foreign exchange loss worsened to N258,29bn as of the end of the third quarter.
This was disclosed in its unaudited results filed with the Nigerian Exchange Limited on Tuesday.
The financial result showed that the FMCG firm’s FX loss, which was N127.457bn as of September 2023 had risen by about 102.65 per cent to N258.29bn at the end of the same period in 2024.
Nestle posted a pre-tax loss of N255.38bn in the nine months of 2024, marking a 350.75 per cent year-on-year decrease from the N56.66bn pre-tax loss posted in the third quarter of 2023.
During the period, the company’s total revenue increased by 68 per cent reaching N665.3bn as against the first nine months of 2023 which stood at N396.59bn.
The company’s net loss during the period was N184.27bn, representing a 327.84 per cent decrease from N43.07bn net loss posted in Q3 2023.
In a press statement accompanying the results, the CEO/MD of Nestlé Nigeria Plc, Mr. Wassim Elhusseini said, “The results from the first nine months of 2024 reflect a strong growth momentum in a challenging business environment.
“Particularly noteworthy is our steady improvement in the gross and operating profit quarter on quarter. The third-quarter performance with a 92 per cent increase in sales year-on-year contributed by positive volume growth and pricing, underscores the strength of our brands and the trust of our consumers. and business partners place in us.
“Delivering these results has involved robust margin management initiatives, strong actions on the forex management front and successful execution of our business plans.
“We are also pleased with the positive impact of new products introduced over the past eighteen months, including Maggi Signature Jollof, Maggi Soya Chunks, NIDO Milk & Soya, Milo 3-in-1, and Cerelac Rice amongst others.
“To meet the growing consumer demand, the company has made significant investments in new capacities & technologies across its operations.
“Since 2023, naira 100 bio has been invested, of which naira 61 bio was spent in 2023 & naira 39 bio in the first nine months of 2024. To support the growth, we have also increased our staff strength by around 4.0 per cent in 2024 and expanded the training programmes,” he said.
El-Husseini said the net profit and equity are primarily impacted by high finance costs due to the revaluation of the company’s foreign currency obligations, triggered by the unprecedented devaluation of the naira.
He noted that excluding the adverse impact of the finance cost, the net profit is positively impacted by significant improvements in both the gross and operating profit.
“For Jan-Sep 2024 period, the operating profit has increased by 21 per cent from naira 91.6 bio to naira 110.8 bio while for July-Sept 2024 quarter the increase has been 54 per cent from naira 30.7 bio to naira 47.3 bio.
“The steady improvement in gross and operating profit along with strong top-line growth underscores the fact that the underlying fundamentals of the company remain strong. It is also encouraging to see that loss in the third quarter has dropped considerably as compared to the previous two quarters.
“In March 2024, the company adopted the revaluation model for the valuation of Land, Buildings, Plant and Machinery from the historical cost. This change has resulted in a revaluation gain net of tax of naira 150 billion which has been reflected in the Statement of Comprehensive Income, Financial position, and Statement for Changes in Equity.
“Our 2024 nine-month result demonstrates that we are well positioned to not only meet our obligations but also to navigate the current challenges and deliver long-term value to our shareholders while contributing positively to our communities.
“Over the past few years, we have remained focused on reducing the dependence on forex by increasing the local sourcing of raw materials. I am encouraged to note steady progress on this front,” Elhusseini said.
As we move forward in the last quarter of 2024, our priority remains creating value for our consumers by providing the nutritious foods and beverages they know and love. We will also continue to focus on the wellbeing of our employees who have been crucial to our success through their hard work and dedication.