Lagos, Nigeria – February 27, 2025 – Nestlé Nigeria Plc has reported a ₦164.60 billion loss after tax for the 2024 financial year, marking a 107.11% increase from the ₦79.47 billion loss in 2023. Despite a 75.25% revenue surge to ₦958.81 billion, the company faced significant cost pressures and rising finance expenses that deepened its losses.
Thank you for reading this post, don't forget to subscribe!Rising Costs Cut Profit Margins
The company’s cost of sales nearly doubled, rising 97.75% to ₦652.46 billion, leading to a gross margin decline from 39.7% in 2023 to 32.0% in 2024.
• Marketing and distribution expenses grew 44.82% to ₦106.85 billion
• Administrative expenses increased by 58.34% to ₦32.53 billion
Operating profit improved 35.62% to ₦167.88 billion, but this was overshadowed by soaring finance costs.
Heavy Debt and Finance Costs Weigh on Performance
Nestlé Nigeria’s finance costs surged 68.23% to ₦392.83 billion, resulting in net finance costs of ₦389.46 billion, up 70.96% from 2023. This significantly contributed to the ₦221.59 billion loss before tax, which more than doubled compared to the previous year.
The company’s debt-to-equity ratio worsened to -708.3%, reflecting heavy reliance on borrowing. Total borrowings rose 62.48% to ₦653.70 billion, pushing total liabilities to ₦950.99 billion, a 44.13% increase.
Declining Financial Position & No Dividend Declared
Nestlé Nigeria’s total assets grew 47.60% to ₦858.70 billion, driven by:
• A 154.65% rise in property, plant, and equipment to ₦421.15 billion
• A 99.09% increase in inventories to ₦174.78 billion
However, the company’s shareholders’ equity remained negative at -₦92.29 billion, reflecting financial strain. Given these challenges, no interim dividend or bonus was declared for the fiscal year.
Stock Market Performance & Outlook
Nestlé Nigeria’s share price stood at ₦975, with a 52-week range of ₦795.30 – ₦975. The company’s market capitalization was ₦772.8 billion, but its negative price-to-earnings (P/E) ratio of -4.70x and return on equity of -178.3% highlight ongoing financial struggles.
With Nigeria’s January 2025 inflation rate at 24.48% and the Monetary Policy Rate (MPR) at 27.50%, Nestlé Nigeria faces a challenging macroeconomic environment. The company’s ability to control costs, manage debt, and improve cash flow will be critical for future recovery.
