Connect with us


Nestle Nigeria Posts ₦104bn Loss In 2023, Shareholders Funds Wiped Out



Nestle Nigeria

Nestle Nigeria Plc has reported a loss before tax of N104 billion for the year ended 2023 compared to a profit before tax of N71 billion same period in 2022.

This is according to the 2023 financial statement of the company published on the NGX on Wednesday, 28th February 2024.

The company reported a foreign exchange loss of N195 billion which was the major reason for the overall loss reported by the company.

The forex losses also resulted in a wipeout of the company’s shareholder funds which is now a negative N78 billion from N30.2 billion a year earlier. This means the company’s liabilities now exceed its assets.

Nestle will also not be able to pay dividends based on the status of its shareholder’s funds.

Breakdown of the result
Revenue for the year is N547.1 billion up from N446.8 billion reported a year earlier
Gross profit N217.7 billion versus N155.7 billion (2022), +39.8% YoY
Operating Profit N123.7 billion versus N87.4 billion (2022), +41.5% YoY
Net Finance Cost -N227.8 billion versus N16.3 billion (2022), +1,297%
Pre-tax loss of N104 billion versus Pre-tax profit of N71.1 billion (2022).
Loss after tax of N79.4 billion versus Profit after tax of N48.9 billion (2022).
Shareholder Funds -N78 billion versus last year’s N30.2 billion.
Interest-bearing loans of N402.2 billion versus N155.2 billion (2022)

According to records seen by Nairametrics, Nestle has drawn down about $362.25 million in foreign currency loans. The loans were obtained from its parent company Nestle SA.

Nestle’s Going Concern Status
The company acknowledged the effect of the losses on its going concern status stating as follows

See also  How to benefit from the Nigerian Government's Student Loan

“The Company made a net loss of N79 billion (2022: net profit N49 billion) for the year ended 31 December 2023 and as at that date, its total liabilities exceeded its total assets by N78 billion (2022: net asset N30 billion).”
“Despite the strong operational performance, the net profit is impacted by significant devaluation of the naira. The company believes that as macroeconomic situation stabilizes, the same would yield positive impact to the overall economy as well as company results.”
“The company has taken robust margin management and cost management initiatives to address significant forex volatility and cost inflation.”
“In 2023, the company’s revenue grew by 22.4%, an increase of ₦100billion and the operating profit increased by 41.2%.”
The negative shareholder funds incurred by Nestle will most likely lead to a fresh raise of capital. This is to ensure the going concern status of the company is guaranteed.

According to Estimates, Nestle will most likely raise capital over N100 billion to ensure it continues to operate effectively.

Nestle Still Cashflow Positive
Meanwhile, the net cash flow of the company remained positive at N49 billion despite the negative shareholder funds.

Nestle also stated that during the year it invested N61 billion in the expansion of its lines at the three factories located in Agbara, Sagamu, and Abaji.
They also invested in the enhancement of our distribution center (DC) operations at Sagamu, Ogun State.
Amidst the economic challenges it also launched 5 new products and ventured into affordable plant-based nutrition through NIDO Soya.

For Diaspora Digital Media Updates click on Whatsapp, or Telegram. For eyewitness accounts/ reports/ articles, write to: Follow us on X (Fomerly Twitter) or Facebook

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Updates

UK university offers £33k scholarships, £4k flight allowances to Nigerians, others

BREAKING: Nigerian Government Suspends Dana Air Over Safety Concerns

Eating catfish as a taboo in Nigerian communities (Part 1)

Naira exchange rate for Wednesday, April 24, 2024, in Nigeria

Google sacks over 50 workers for protesting against deal with Israel

Labour Party sacks State Chairman, Lincoln Charles, after 13 years

“I will resign if I do not see the Yahaya Bello case through to the end” – EFCC Chairman (VIDEO)

HURIWA implores Nigerian Governor to end banditry, rape by armed herdsmen

Sirika, Nigeria’s former Aviation Minister, arrested over alleged N8bn fraud

Kenya to deport fugitive Binance Chief to Nigeria

Subscribe to DDM Newsletter for Latest News