Nestlé Nigeria Reports 107% Increase in Net Loss to N165bn for 2024

Nestlé Nigeria Plc’s net loss soared by 107% to N164.595 billion in 2024, driven by ongoing inflation pressures despite a 75% revenue increase to N958.814 billion. Cumulatively, the rise in costs of sales negatively impacted margins, leading to a pre-tax loss of N221.588 billion. The fourth quarter showed a turnaround with a profit of N19.7 billion owing to strategic investments and a workforce expansion.

Nestlé Nigeria Plc reported a significant net loss that increased by 107% in 2024, totaling N164.595 billion, compared to N79.473 billion from the previous year. This decline is attributed to ongoing challenges in the consumer sector, despite a notable tax credit. The company’s revenue, however, rose by 75% to N958.814 billion, up from N547.118 billion in 2023, but was hindered by rapidly increasing costs of sales, which rose by 97.74%.

The rise in costs of sales to N652.459 billion from N329.945 billion reflects the adverse impact of Nigeria’s inflation on production inputs. Furthermore, Nestlé Nigeria faced increased net finance costs due to higher interest rates, with finance costs surging to N392.832 billion in 2024, in contrast to N233.503 billion in 2023, amid a decline in finance income to N3.367 billion.

The company reported a pre-tax loss of N221.588 billion, representing a 113% increase from the prior year. Mr. Wassim Elhusseini, CEO/Managing Director of Nestlé Nigeria PLC, commented on the results, highlighting the resilience of their brands despite challenging conditions and expressing pride in the company’s ability to achieve a revenue growth of 75.2% for the year and a notable operating profit increase.

In the fourth quarter of 2024, Nestlé Nigeria experienced a net profit of N19.7 billion after previously reporting a loss of N36.4 billion in Q4 2023. The operating profit for this quarter surged by 77.1%, indicating a strong recovery and reinforcing the company’s solid foundation. Since 2023, Nestlé Nigeria has committed N132 billion towards enhancing its operations with an additional N72 billion in 2024, focusing on market positioning and consumer demand.

Nestlé Nigeria also adopted a revaluation model for its assets in 2024, resulting in a recognized net revaluation gain of N150 billion, further evidencing its commitment to grow sustainably. Additionally, the company expanded its workforce by 8% to support these growth endeavors while also committing to social responsibility initiatives aimed at supporting women and youth development.

Overall, despite facing considerable losses due to high operational costs, Nestlé Nigeria’s strategic investments in infrastructure and workforce expansion signal its intent to enhance performance and meet market demands.

In summary, Nestlé Nigeria Plc saw its net loss escalate significantly in 2024, primarily due to soaring operational costs despite substantial revenue growth. The company’s strategic investments and improvements in operational performance, particularly in the fourth quarter, indicate a potential recovery. Continued focus on social responsibility and infrastructure development will be critical as Nestlé navigates the challenging economic landscape in Nigeria.

Original Source: dmarketforces.com