Nestle Nigeria Plc has reported a loss before tax of N104 billion for the year ended 2023.
This is according to the 2023 financial statement of the company published on the NGX
In 2022, the company recorded a profit before tax of N71 billion.
The company also reported a foreign exchange loss of N195 billion which was the major reason for the overall loss reported by the company.
The forex losses also resulted in a wipeout of the company’s shareholder funds which is now a negative N78 billion from N30.2 billion the previous year, indicating that he company’s liabilities now exceed its assets.
As a result of the loss, the company will not be able to pay dividends based on the status of its shareholder’s funds.
Further details in the report show that Nestle has drawn down about $362.25 million in foreign currency loans from its parent company, Nestle SA.
The company acknowledged the effect of the losses on its going concern status, saying: “The Company made a net loss of N79 billion (2022: net profit N49 billion) for the year ended 31 December 2023 and as at that date, its total liabilities exceeded its total assets by N78 billion (2022: net asset N30 billion).”
“Despite the strong operational performance, the net profit is impacted by significant devaluation of the naira. The company believes that as macroeconomic situation stabilizes, the same would yield positive impact to the overall economy as well as company results.”
“The company has taken robust margin management and cost management initiatives to address significant forex volatility and cost inflation. In 2023, the company’s revenue grew by 22.4%, an increase of ₦100billion and the operating profit increased by 41.2%,” it added.
Meanwhile, the company’s net cash flow remained positive at N49 billion despite the negative shareholder funds.
Nestle also stated that during the year it invested N61 billion in the expansion of its lines at the three factories located in Agbara, Sagamu, and Abaji and also invested in the enhancement of its distribution centre (DC) operations at Sagamu, Ogun State.
It also launched 5 new products and ventured into affordable plant-based nutrition through NIDO Soya, within the period.
