Despite Investing N61bn To Expand Operations, Nestle Nigeria Records Worst Loss Since 2012

Nestle Nigeria has recorded N79bn loss after tax despite heavy investment to improve profitability and expand its reach in 2023.

This is Nestle’s worst performance since 2012.

The beverage maker had the ambition of leveraging on its sterling performance in 2022 when it posted a N49bn profit after tax.

Unfortunately for Nestle, it had to battle with naira scarcity and subsequently currency devaluation as a result of the floating of the naira. By December, the naira depreciated by around 98 per cent, according to PricewaterhouseCoopers (PWC).

Although the company saw an impressive surge in sales by N100bn to N547.1bn in 2023 from the N446.8bn revenues in 2022, the company hit a roadblock as net finance cost slashed the gains that were due to the company.

From a net finance cost of N21bn in 2022, Nestle saw a N212bn rise to N233.5bn in 2023 as a result of the naira devaluation. Nestle reported a foreign exchange loss of N195bn which was the major reason for the overall loss

The company saw a 280 per cent loss in net profit to N79.47bn while shareholders’ funds were wiped out. The company that boasted of N30.2bn shareholders’ fund in 2022 fell into a negative equity of -N78bn by December 2023.

This was a result of Nestle’s total liability rising to N659.8bn while the total assets were N581.7bn.

The company is optimistic that it will return to profitability when the “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.”

The company invested N61bn in the expansion of its lines at the three factories located in Agbara, Sagamu and Abaji.

To outsmart competitors, Nestle launched five new products, Maggi Soya Chunks, Milo 3-in-1, Cerelac Bag-n-Box and Milo Enersnakz. The company also ventured into plant-based nutrition through NIDO Soya.

The company said no “Interim or final dividend was declared for the 2023 financial year.”