Foreign Exchange:  Nestlé Nigeria Reports N79.47bn Loss 

Kayode Tokede

Nestlé Nigeria Plc, yesterday announced N79.47 billion loss in its audited full financial year report for period ended December 31, 2023, from N48.97 billion reported in 2022.

The multinational Fast Moving Consumer Goods (FMCG) company in its result and accounts on the floor of the Nigerian Exchange Limited (NGX) also declared N104.03 billion loss before tax in 2023 from N71.11 billion in 2022 over the devaluation of the Naira that hurt its bottom line.

The company declared a net exchange difference on translation of foreign currency-denominated balances of about N195.07billion in 2023 from N8.45billon in 2022 to bring its finance cost to N233.5billon in 2023, representing an increase of 1005 per cent from N21.14billiion reported in  2022.

The company declared N547.1 billion revenue in 2023, representing an increase of 22.4 per cent from N446.82 billion reported in  2022.

Gross profit stood at N217.2 billion in 2023, representing a 39.4per cent increase from N155.8 billion in 2022 as operating profit increased by  41.2per cent to N 122.7 billion from  N35.8 billion reported in 2022.

The foreign exchange 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 as Nestle will also not be able to pay 2023 financial year dividend to shareholders based on the status of its shareholder’s funds.

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.

Commenting over the result and accounts, the Managing Director and CEO of Nestlé Nigeria, Mr. Wassim Elhusseini in a statement said, “I thank every member of our team for the unwavering commitment and dedication which resulted in the strong revenue growth and operating profit vs 2022 despite the challenging economic environment.

“The devaluation of the Nigerian Naira in 2023 which led to a revaluation of our foreign currency obligations undoubtedly impacted our financing cost and consequently the profit after tax. However, we remain optimistic of our capacity to overcome the current economic difficulties and emerge stronger.”

“Looking ahead, we remain dedicated to our purpose of unlocking the power of food through responsible local sourcing and confection of the high-quality nutritious food and beverages that families across Nigeria prefer.

“We also remain steadfast in optimizing our operations to ensure the availability and accessibility of affordable and nutritious products to our consumers in anticipation of a timely turnaround in the business environment.”