Nestlé Nigeria Plc reported a net loss of N164.6 billion for 2024, marking a 107% increase from 2023. Revenue rose by 75% to N958.8 billion; however, skyrocketing costs of sales pressured profit margins. The company achieved a return to profitability in Q4 2024 with a net profit of N19.7 billion, after significant investments and workforce expansion.
Nestlé Nigeria Plc experienced a significant increase in net loss in 2024, rising by 107% to N164.6 billion from N79.5 billion the previous year. The company’s challenges stemmed from sustained pressures within the consumer sector. Although revenue grew 75% year on year, reaching N958.8 billion, escalating costs of sales, which surged by 97.7% to N652.5 billion, adversely impacted profitability due to adverse inflationary effects in Nigeria.
In 2024, the company’s net finance costs surged as a result of high borrowing rates, despite a decrease in finance income from N5.7 billion to N3.4 billion. Consequently, finance costs escalated drastically from N233.5 billion in 2023 to N392.8 billion in 2024. The pre-tax loss also expanded to N221.6 billion, representing a 113% increase compared to N104 billion in the prior year.
Wassim Elhusseini, CEO and Managing Director of Nestlé Nigeria Plc, remarked that the results illustrate the resilience of the brand and its teams in the face of a challenging business environment. Elhusseini noted, “The impressive 75.2% revenue growth… reflects the robustness of our operating performance.” He further mentioned that the net profit was affected by high finance costs resulting from the depreciation of the Naira.
The fourth quarter of 2024 saw a turnaround for Nestlé Nigeria, achieving a net profit after tax of N19.7 billion, in stark contrast to a loss of N36.4 billion in the fourth quarter of 2023. Operating profit for this quarter improved significantly by 77.1%, from N32.2 billion to N56.9 billion, indicating a recovery in financial performance and underlying business strength.
Since 2023, Nestlé Nigeria has invested N132 billion in enhancing its operational capacity, with N72 billion allocated in 2024 alone. Additionally, the company has increased its workforce by 8% to support growth across its various segments. These strategic investments align with the company’s long-term objectives to strengthen market positioning and meet consumer demand effectively.
In 2024, Nestlé Nigeria adopted a revaluation model for its physical assets, leading to a net revaluation gain of N150 billion. This adjustment has positively impacted the financial statements of the company. Furthermore, the company remains committed to social responsibility initiatives that promote development for women and youth, affirming its role as a positive societal force.
Nestlé Nigeria Plc witnessed a dramatic increase in net loss in 2024 due to heightened costs in a challenging economic environment despite notable revenue growth. The company marked a significant recovery in the fourth quarter with profits attributed to strategic investments and enhanced operational capacity. CEO Wassim Elhusseini highlighted the resilience of the brand and commitment to social responsibility, emphasizing proactive steps towards a sustainable recovery.
Original Source: dmarketforces.com
