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

Nestlé Nigeria’s net loss expanded by 107% to N164.595 billion in 2024, primarily due to persistent inflation impacting costs. Revenue grew by 75% to N958.814 billion, but costs of sales rose even faster, negatively affecting margins. Return to profitability occurred in Q4 2024, with net profits of N19.7 billion. The company invested heavily in operations while addressing social responsibility initiatives.

Nestlé Nigeria Plc has reported a dramatic increase in its net loss for the year 2024, which soared by 107% to N164.595 billion from N79.473 billion in the previous year. This alarming increase is largely attributed to persistent challenges within the consumer sector, as rising inflation in Nigeria has adversely impacted input costs despite the company benefiting from substantial tax credits.

Despite an impressive revenue growth of 75% year on year, reaching N958.814 billion in 2024 compared to N547.118 billion in 2023, the company encountered increased costs of sales. The costs surged by 97.74%, totaling N652.459 billion, which significantly eroded profit margins due to the adverse economic conditions stemming from the high inflation rate and a weak Naira.

Moreover, Nestlé Nigeria experienced a drastic rise in net finance costs driven by high-interest rates on borrowings, as finance costs escalated from N233.503 billion in 2023 to N392.832 billion in 2024. The company reported a significant pre-tax loss of N221.588 billion, reflecting an increase of 113% from the previous year’s loss of N104.025 billion.

Mr. Wassim Elhusseini, CEO of Nestlé Nigeria Plc, commented on these results, highlighting the resilience of the brand amid a challenging environment. He noted that despite high finance costs affecting net profit, the company achieved a remarkable revenue growth of 75.2% and a 35.6% improvement in operating profit.

The fourth quarter of 2024 saw Nestlé Nigeria return to profitability, reporting a net profit of N19.7 billion, compared to a loss of N36.4 billion in Q4 2023. This recovery was driven by an operating profit increase of 77.1%, indicating a strong underlying performance from the company.

Since 2023, Nestlé Nigeria has directed N132 billion towards investments to bolster operations, with N72 billion allocated in 2024 alone, and has expanded its workforce by 8%. This strategic investment aims to enhance market position and cater to consumer demands.

In March 2024, the company transitioned to a revaluation model for its fixed assets, resulting in a remarkable net revaluation gain of N150 billion, positively impacting its financial statements.

Alongside operational goals, Nestlé Nigeria committed to social responsibility initiatives, emphasizing its dedication to supporting women’s and youth development as part of its corporate strategy.

In conclusion, Nestlé Nigeria’s financial results for 2024 reveal a stark increase in net loss due to rising costs amidst economic challenges, despite significant revenue growth. The company’s strategic investments and recent shifts to strengthen its financial standing signify its commitment to long-term objectives. The return to profitability in Q4 2024 further underscores the resilience and adaptability of the company in a difficult market environment. As it addresses cost pressures and invests in community initiatives, Nestlé Nigeria aims to balance operational success with social responsibility, fostering a positive impact in society.

Original Source: dmarketforces.com