Nestle Nigeria records an 8.7% drop in first quarter profits as revenues plunge

NIGERIA – Food and beverage giant, Nestle Nigeria Plc, has released its unaudited financial statement for the first quarter (Q1) period ended March 31, 2020, recording a 8.7% drop in profit due to increase in administrative and distribution expenses.

The company’s revenue during the period under review decrease by 0.9% to N70.33 billion (US$180m), against N70.97 billion (US$181m) attained in the corresponding period in 2019.

Cost of sales for the first quarter is N38.67 billion (US$99.15m), as against N39.50 billion (US$101.2m) that was recorded for in 2019. This represents a 2.1%.

However, gross profit for the period shows a slight improvement with a 0.6% increase to N31.66 billion (US$81.1m) from N31.47 billion (US$80.6m).

Profit before tax is N17.45 billion (US$44.7m) as against N19.12 billion (US$49m) that was achieved for the same period in 2019. This shows an 8.7% decline; while profit after tax is about N11.20 billion (US$28.7m), a 12.84% decline against N12.85 billion (US$32.9m) that was achieved for Q1 2019.

For the full year 2019, Nestle reported earnings growth of 6% for the full year 2019.

Profit rose to N45.6bn (US$125.6m) from N43bn (US$118.5m) in 2018.

The company benefited from a 6.7% growth in revenue to N284bn (US$782.8m), also helped by operating profit rise of 19% to N72bn (US$198.4m).

According to the company, the beverage segment which accounts for 38% of total sales grew by 10% to N108bn (US$297.7m), with pre-tax profit of N25bn (US$68.9m), a 45% increase. Beverage products include Milo, Chocomilo, Nido, Nescafe and Nestle Pure Life.

The food segment grew revenue by 4.7% to N176bn (US$485.1m) and a pre-tax profit of 8% to N47bn (US$129.5m). Food products include Maggi, Cerelac, Nutrend, Nan, Lactogen and Golden Morn.

On the 2020 outlook, the company will continue to focus on the innovation and the renovation of products and on rolling out new solutions and services in response to changing consumer needs.

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