Nestle Nigeria registers marginal rise in revenue as parent company increases stake in the unit

NIGERIA – Nestle Nigeria has posted a 1.1% growth in revenue for the year 2020, to N287.084 billion (US$753m) from last year’s N287.035 billion (US$752.87m).

The food manufacturer made stringent decisions during the period characterized with a challenging business environment, strictly managing its distribution/marketing expenses which decreased by 4.8% to N43 billion (US$112.78m).

However, its cost of sales increased from N155billion (US$406.55m) in 2019 to N168billion (US$440.65m) in 2020, while both administrative and finance costs endured 9% and 95% increases respectively.

This offset the marginal revenue gains resulting to profit declining from N45.6 billion (US$119.6m) of the previous corresponding period to N39.3 billion (US$103.08m) for the year.

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Commenting on the results, Mr. Wassim Elhusseini, Managing Director and CEO of Nestlé Nigeria PLC, said, “Amidst a very challenging business environment in 2020, we strengthened market leadership across our categories.

“Thanks to our high performing team, we successfully continued to provide our consumers with high-quality affordable foods and beverages to enjoy every day.”

In line with the company’s purpose of unlocking the power of food to enhance quality of life for everyone, Nestle Nigeria broadened its portfolio in 2020 introducing the new GOLDEN MORN Multi-Cereal, fortified with Iron and other vitamins and minerals.

Nestle Nigeria’s 2020 profit declined from US$119.6m in 2019 to US$103.08m

“Going into 2021 – which portends to be another challenging year – we will continue to focus on keeping our people safe, continued supply of high-quality nutritious foods and beverages to consumers as well as caring for our communities and the planet.

“We will also keep supporting our business partners as we strengthen our operations to adapt to the rapidly changing reality,” concluded Wassim.

Its parent company, Nestle S.A. has increased its stake in the business purchasing 2.2 million units of ordinary shares in four transactions.

A breakdown of the transactions shows that it purchased 1.98 million units on March 2, 2021, at N1,348.84 (US$3.54) per share and another 186,277 at N1,349.74 (US$3.54) per share on March 3, reports The Cable.

On March 4, the company bought 50,000 units of shares at N1,350 (US$3.54) per share and on March 5, bought 27,019 at N1,349.03 (US$3.54) unit per share.

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Before the transactions, the company held 527,080,970 units of the total shares in the Nigerian Unit, which represents 66.5% of the total shares.

Meanwhile in Zimbabwe, following the inauguration of its new US$2.5m breakfast cereals manufacturing line, Nestle Zimbabwe has registered a 20% rise in exports with earnings increasing from an average of US$500,000 to US$700,000 per month.

The expansion has delivered over 30% incremental volume through put, as the food and beverages concern expands capacity, targeting to triple its US$400,000 monthly exports in the medium term.

“Our aim is to ensure progressive growth of exports, however with a view of generating foreign currency required to sustain our business operations and contributing positively to easing the pressure on the Forex Auction System without depriving the local market,” said Eunice Ganyawu-Magwali, Nestlé MD for Zimbabwe, Zambia and Malawi.

The push to generate forex comes as the firm has reduced its import bill to below 20% from above 85% through value chain development under the import substitution programme, reports Business Times Zimbabwe.

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