Nestlé Nigeria Revalues Assets to N305.4 Billion Amid Economic Challenges


Nestlé Nigeria Plc (Nestlé) has revalued its property, plant, and equipment (PPE) to N305.4 billion as of March 16, 2024, significantly increasing from the previous carrying value of N88.3 billion as of December 31, 2023, under the historical cost model.

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Major Revaluation of Key Properties

The revalued assets include the Agbara Factory, Flowergate Factory, Sagamu, Abaji Factory in Abuja, and the Agbara and Ota Distribution Centres. This revaluation, conducted by M/s Niyi Fatokun and certified by the Financial Reporting Council of Nigeria, aims to more accurately reflect the company’s market value amidst ongoing economic challenges.

Strategic Move to Reflect True Financial Standing

At a recent Extra-Ordinary General Meeting (EGM) in Lagos, Nestlé’s Board presented an Explanatory Note to shareholders. They explained that the negative net assets reported at the end of 2023 were due to the revaluation of foreign currency obligations. The PPE revaluation is a strategic step to provide a clearer picture of the company’s financial position.

Compliance with International Standards

Nestlé Chairman, Gbenga Oyebode, highlighted that the company had established a technical memo outlining the accounting treatment of the revaluation in accordance with International Accounting Standards (IAS), International Financial Reporting Standards (IFRS), and the Companies and Allied Matters Act (CAMA) 2020. The Board approved the adoption of the “revaluation model” on March 25, 2024, and subsequent financial statements will be prepared based on this model.

### Enhanced Financial Reporting

“The financial statements for January-March 2024 were prepared based on the revaluation model for the class of assets revalued under PPE. This shift to the revaluation model is expected to provide more reliable and relevant information on the company’s financial position, aligning asset values with current market conditions,” Oyebode stated.

Assurance Amid Economic Difficulties

Despite the challenging operating environment, the Board reassured shareholders of the company’s strong fundamentals. They committed to monitoring policy developments and supporting measures to address the negative net assets of the company.

Positive Reception from Shareholders

While no formal resolutions were passed at the EGM, the Board’s actions to revalue the assets and safeguard the company’s interests were positively acknowledged by the shareholders.

Gbenga Samson
Gbenga Samson
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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