In 2024, Nestlé Nigeria Plc witnessed a net loss increase of 107% to N164.595 billion, driven by rising costs amid economic pressures. Revenue grew by 75% to N958.814 billion, while finance costs soared due to high interest rates. Acting decisively, the company turned profitable in Q4 2024, posting N19.7 billion in net profit, reinforced by significant investments in operations and workforce expansion.
Nestlé Nigeria Plc experienced a significant increase in net loss during 2024, reaching N164.595 billion, which marks a staggering 107% rise compared to N79.473 billion in 2023. This downturn was attributed to persistent pressures within the consumer sector, despite the company benefiting from substantial tax credits. Revenue, on the other hand, surged by 75%, amounting to N958.814 billion, up from N547.118 billion the previous year.
However, the costs of sales escalated at a rate surpassing revenue growth, increasing by 97.74% to N652.459 billion. This rise in costs put pressure on profit margins as the company grappled with the adverse effects of Nigeria’s inflation on input costs. The overall business environment in Nigeria remained challenging, exacerbated by high borrowing rates and the devaluation of the local currency.
Nestlé Nigeria faced soaring net finance costs, which surged due to increased interest rates. While finance income dropped to N3.367 billion from N5.690 billion, finance costs skyrocketed to N392.832 billion, up from N233.503 billion in 2023. Consequently, the company recorded a pre-tax loss of N221.588 billion, reflecting a 113% increase from the N104.025 billion loss posted in the prior year.
Commenting on the results, Mr. Wassim Elhusseini, CEO/Managing Director of Nestlé Nigeria PLC, emphasized the resilience of their brands and teams despite the difficult business conditions. He noted that the significant revenue growth of 75.2% and the 35.6% increase in operating profit indicate a strong operational performance amid high finance costs and currency revaluation impacts. The company’s efforts to boost its investment and workforce also demonstrate their commitment to growth in challenging times.
In the fourth quarter of 2024, Nestlé Nigeria demonstrated a turnaround by reporting a net profit after tax of N19.7 billion, recovering from a loss of N36.4 billion in Q4 2023. Operating profit increased by 77.1%, from N32.2 billion to N56.9 billion in this quarter, signifying resilience in the company’s fundamentals. The net revaluation gain of N150 billion from adjusted land and asset values also contributed positively to financial results.
Furthermore, over N132 billion has been invested in operations since 2023, with N72 billion in 2024 alone, aimed at strengthening market position and meeting consumer demands. Additionally, the workforce grew by 8% to enhance productivity. Nestlé Nigeria remains dedicated to creating societal value through responsible initiatives focusing on women and youth development.
In summary, Nestlé Nigeria Plc reported a notable rise in net losses for 2024, driven by escalating costs amidst a challenging economic landscape. Nonetheless, the company achieved significant revenue growth and a profitable turnaround in Q4 2024, thanks to strategic investments and strong operational performances. The firm remains committed to its long-term goals by enhancing market positioning while engaging in social responsibility initiatives.
Original Source: dmarketforces.com
