Nestlé Nigeria nets N26b profit in 6 months

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Nestlé Nigeria nets N26b profit in 6 months

 


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Nestle Nigeria

[url=https://thenationonlineng.net/nestle-nigeria-inaugurates-4-community-water-projects/]Nestle Nigeria Plc recorded a well-rounded performance in the first half with increased sales and profitability. All key performance indices trended upward during the six-month period, raising the prospects that Nigeria’s highest-priced quoted company may surpass its previous performance.

Key extracts of the half-year report for the period ended June 30, 2019 showed that sales rose to N141.91 billion in first half 2019 as against N135.3 billion in corresponding first half of 2018. With decline in cost of sales from N79.71 billion to N75.83 billion, gross profit rose from N55.58 billion to N66.08 billion. Operating profit rose from N32.15 billion to N40.43 billion.

Considerable reduction in finance costs, from N1.12 billion to N888.68 million, boosted the bottom-line with net finance income of N2.42 million in first half 2019 as against deficit of N280.67 million in first half 2018. With these, profit before tax rose from N31.87 billion in first half 2018 to N40.44 billion in first half 2019. After taxes, net profit increased to N26.25 billion in first half 2019 compared with N21.46 billion in comparable period of 2018.

The company attributed the growth to consistent investment behind its brands, intensified efforts to communicate with consumers and continuous investment in route to market to deliver better value to consumers.

In a statement signed by Company Secretary, Nestle Nigeria, Bode Ayeku, the board of the company commended its consumers for their trust and continued loyalty as well as the discipline and dedication of its staff for driving sustainable and profitable growth.

Directors of the company noted that amid a challenging economic context, the company remains confident in its capacity to innovate to keep delighting consumers with nutritionally superior products and foster its people’s ability to win.

“In turn, these investments will continue to create shared value for our shareholders and for the people of Nigeria. In line with our purpose which is enhancing quality of life and contributing to a healthier future, we will remain focussed on enabling thriving and resilient communities through local sourcing, expanding the commercialisation of our food and beverages to deliver accessible and affordable nutrition to more people and strengthening our value chain to gain further efficiencies,” the board stated.

Nestle Nigeria distributed N30.52 billion as final dividend for the 2018 business year, bringing total dividend payout for the year to N46.42 billion. The company had in November 2018 paid N15.9 billion as interim dividend.

Shareholders received a final dividend per share of N38.50 in addition to interim dividend per share of N20, bringing total dividend per share for the year to N58.50.

With the dividend payout above the N43.01 billion net profit recorded in 2018, the company explained that the total payout of N46.42 billion included net profit for the year and part of the net profit for the 2019 business year.

According to the company, the final dividend of N38.50 per share comprised of N34.20 from the profit for the 2018 business year and N4.30 from the net profit for the 2019 business year.

Key extracts of the audited report and accounts of Nestle Nigeria for the year ended December 31, 2018 had shown that the company rode on the back of improved operating efficiency and finance cost management to optimise its bottom-line performance in 2018, growing net profit by 27.5 per cent to N43.01 billion.

The report showed that turnover rose to N266.27 billion in 2018 as against N244.15 billion in 2017, representing an increase of 9.06 per cent. Cost of sales increased by 6.33 per cent from N143.28 billion in 2017 to N152.35 billion in 2018. Gross profit thus rose faster by 12.94 per cent to N113.92 billion in 2018 compared with N100.87 billion in 2017.

Marketing and distribution expenses increased to N43.49 billion from N35.16 billion while administrative expenses dropped from N10.02  billion to N9.79 billion.

Operating profit consequently improved from N55.7 billion in 2017 to N60.64 billion in 2018. Finance costs dropped by 82.75 per cent from N15.109 billion to N2.606 billion. Profit after tax grew by 27.53 per cent from N33.72 billion in 2017 to N43.01 billion in 2018. With these, earnings per share rose by 27.52 per cent to N54.26 in 2018 as against N42.55 in 2017. Total assets increased by 10.58 per cent to N162.34 billion in 2018 as against N146.80 billion in 2017. Shareholders’ equity also improved from N44.88 billion to N50.22 billion.