Nestle Nigeria reports N165 billion annual loss as naira devaluation weighs

The financial distress of Nestle Nigeria, the local subsidiary of the Swiss multinational Nestlé S.A., worsened last year as the company incurred N164.6 billion in net loss, more than twice the loss it reported a year earlier.

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The company’s audited annual report released on Thursday showed impact of a foreign exchange volatility that hurt profit following a sharp devaluation of the naira, its reporting currency.

Revenue increased by 75.2 per cent to N958.8 billion, boosted by a marked improvement in the income from its food and beverages divisions. Operating profit came in at N167.9 billion, compared to N123.8 billion in 2023.

Nestle Nigeria’s revaluation gain from property, plant and equipment net of tax stood at N150 billion, helping cut the total comprehensive loss for the year to N14.6 billion, 81.7 per cent lower than that of 2023. Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) grew by 45.2 per cent.

Meanwhile, the maker of Milo, Golden Morn and Maggi achieved a net profit after tax of N19.7 billion in the fourth quarter of the year, relative to a loss of N36.4 billion.

It indicates that manufacturing might have begun to turn the corner at last and could build on that solid result through 2025 to turn the table on the loss-making jinx that has kept its net asset position negative for quite a while.

“These results indicate a robust operational performance in a challenging market,” the company said in a statement published by the Nigerian Exchange Limited on Thursday.

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Commenting on the report, CEO/Managing Director of Nestlé Nigeria PLC, Wassim Elhusseini, described the just released financial statements as a reflection of the “resilience and robustness” of their operating performance.

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“Our 2024 results demonstrate the resilience of our brands and teams and underscore our strong fundamentals in a challenging business environment. The impressive 75.2% revenue growth for the year and 35.6% improvement of our operating profit to 167.9 billion Naira reflect the robustness of our operating performance,” Mr Elhusseini said.

He noted that net profit and equity were impacted by high finance costs associated with the revaluation of the company’s foreign currency obligations, due to an unprecedented devaluation of the naira.

“I am very pleased to state that our Q4 2024 standalone results mark a return to profitability with a net profit of Naira 19.7 billion, against a loss of 36.4 billion Naira in Q4 2023. Our investments of 132 billion naira in our operations since 2023, including Naira 72 billion in 2024, are strategically aligned to enhance our market position and meet consumer demand,” he said.

He emphasised that Nestle Nigeria has expanded its workforce by 8 per cent to support growth across its portfolio. The company noted that the turnaround from loss to profitability in Q4 underscores the strength of its underlying fundamentals.

“We remain optimistic that our ongoing initiatives to tackle economic challenges will yield positive results and support consumer demand. Our performance in Q4 2024 demonstrates that we are well-positioned to tackle the current challenges and deliver long-term value to our shareholders, guided by our dedication to operational efficiency and innovation,” Mr Elhusseini said.