National Wire About Nigerians, Nigerian Business and Other Stories
By Friday Ekeoba
Investors in the Nigeria equities market have continued to wait with birthed breath on the 2025 full year Nestle Nigeria financial statement of health of the conglomerate which is amongst the top listed companies on the Nigerian Exchange Limited (NGX) by large cap.
The investors anticipation boils down from historical trajectory of the company which was listed on 20th April, 1979 with authorized paid up capital structure of N330,273.438.00 and has since then till date, notwithstanding the economic contraption that has continue to beset the domestic market, deliver return on investment to members.
As a giant in manufacturing, Marketing and Distribution of Food Products, and the Manufacture of Hydrolysed Plant Protain Mix for MAGGI Cubes and other Food Products going concern, its first-half 2025 reports which shows significant improvement compared to the same period in 2024 is another needed impetus for investors delight in the company shares.
An x-ray of the financial of the company whose products, like Milo, Maggi, Golden Morn cereal, Nescafe amongst others are household name in the country, Key highlights in the 2025 half year include a 43% revenue increase to N581.1 billion, a turnaround from a loss to a profit before tax of N88.4 billion, and a 106% increase in operating profit.
These positive results is attributed to a more stable macroeconomic environment, particularly the relative stability of the naira.
A further cursory look at the books showed that revenue rose to N581.1 billion from N407.0 billion in 2024, Operating Profit up 106 % to N130.4 billion from N63.1 billion in half-year of 2024. Profit Before Tax climbed to N88.4 billion, which is a significant turnaround from a loss of N252.5 billion in hal-year 2024.Profit After Tax rose to N50.6 billion, compared to a loss of N176.6 billion in H1 2024. Earning Per Share (EPS) close at N63.80, which is a substantial improvement from a loss per share of N(223.19) in the prior year.
Analysts from Cordoros and Maristerm securities attributed that factors contributing to the positive results includes the relative stability of the Nigerian naira in the first half of 2025, compared to the volatility in 2024, noting that this has helped stabilize costs.They claimed that the company has managed to navigate foreign exchange challenges more effectively, a key factor in its improved profitability.
Also there has been Improved Cost Dynamics, which arose from Stabilization in the macroeconomic environment leading to a better cost management.
A unit cost of Nestle Nigeria shares at the close of trading on October 13th stood at N1,870.00.
Another business policy that has made Nestle Nigeria shares attractive to its members is the payment of dividend.
Although in other clime, capital appreciation of shares is key, as it allows companies to have a strong financial base. But in Nigeria majority of shareholders invest because of the yearly returns they get from their investment.
Their argument is usually centered on lack of incentives from the government, as their dividend payment goes a long way to offset bills, like school fees, house rent and meeting their immediate demands.
A peep into Nestle Nigeria dividend ten years payment history showed that on May 18, 2023, shareholders received N36.50; December 5 & June 30, 2022 N50.50; December 6 & June 23, 2021 N54.50; December 7 & July 2, 2020 N70.00, May 13 & Nov 25, 2019 N63.50; May 07 & Nov 26, 2018 N47.50; May 08 & Nov 27, 2017 N25.00; May 09, 2016 N19.00; April 27 & Nov 23, 2015 N27.50; Nov 24, 2014 N10.00.
Looking back from its operations challenges in recent times, where it reported a loss of N79.47 billion in 2023 and a larger loss of N164.6 billion in 2024, Nestlé Nigeria has taken proactive steps to address its financial challenges, ensuring the company’s long-term sustainability, even as its strong cash position and strategic asset revaluation have bolstered its financial standing.
The company generated a positive cash flow of N48.8 billion, driven by strong operating cash flows. Cash and cash equivalents increased by 42% to N167.8 billion, demonstrating the company’s financial resilience. The company revalued its fixed assets from N165.2 billion to N305.4 billion, effectively plugging the negative shareholders’ funds gap.
While Nestle Nigeria still faces challenges, including negative retained earnings, the company’s strategic moves are expected to yield positive results in the long run. By focusing on reducing forex exposures and improving profitability, Nestlé is poised to return to dividend payments, bringing relief to its shareholders.
Nestle’s proactive approach to financial management and strategic decision-making demonstrates its commitment to navigating challenges and capitalizing on opportunities. With a strong foundation in place, the company is well-positioned for future growth and success.
