Despite the challenging operating environment, Nestlé Nigeria PLC recorded a 22.4% increase in sales in 2023 with earnings of N547.1 billion, an increase of N100.2 billion over 2022.
The 2023 Annual Report and Accounts were presented yesterday at the Annual General Meeting (AGM) held at Muson Centre in Lagos with shareholders commending the performance of the company in the year under review despite the losses occasioned by naira devaluation.
Gross profit was N217.2 billion, representing a 39.4% increase from N155.8 billion in 2022. Operating profit increased by 41.2% to N122.7 billion, an increase of N 35.8 billion over 2022.
Daily Trust reports that the devaluation of the naira had an adverse impact on profit after tax, resulting in a loss of -N79.5 billion for 2023.
Though the shareholders expressed mixed feelings over the absence of dividends for the first time in the last 15 years, they were optimistic that the situation will improve in the current year.
Chief Timothy Adeseun, a shareholder, said, “We should have been laughing but for the economic situation. For the past 63 years, Nestle has been nourishing this nation. Thank you Nestle for standing firm in this situation.
“We are not relenting and we are not taken aback. What has happened (losses) is not by the performance of the company but the economic performance.”
Another shareholder, Pastor Olagoke Samson, commended the company for employing more people where some companies are retrenching.
Mrs Bisi Bakare stated that it is the desire of shareholders to enjoy dividends every year but pleaded with the board to consider bonus for the year 2024.
Commenting on the results, Managing Director and CEO of Nestlé Nigeria PLC, Mr Wassim Elhusseini, stated that the devaluation of the naira in 2023 “which led to a revaluation of our foreign currency obligations undoubtedly impacted our financing cost and consequently the profit after tax. However, we remain optimistic of our capacity to overcome the current economic difficulties and emerge stronger.”
Chairman of the board, Mr Gbenga Oyebode, while responding to questions from shareholders stated that the company is trying as much as it can to do backward integration, purchasing most of its grains locally.
He said, “Our company is growing and we need to credit management and staff for that effort. In the middle of the most difficult operating environment that we had ever seen, if anybody told me that the MPR (monetary policy rate) would be 26 and half percent as of yesterday, I would say no. If anybody told me that we would devalue by almost 50 per cent I would say no, if anybody told me that inflation would be at 33 and no end in sight, these are all things that are affecting our businesses that we can’t control, the ones we can control we have discussions about them. On the whole, the macros are working against us. With respect to foreign currency obligations, it was unable to source for foreign currencies in the country.
“The revenues are up, the volumes are up, it is a sustainable business. We have been very transparent…”
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