Nestlé Nigeria declares N221.6bn losses in 2024

Nestlé Nigeria Plc has reported a staggering loss before tax (LBT) of N221.589 billion for the financial year ended December 31, 2024, marking a 113per cent year-on-year (YoY) decline from 2023.

The sharp downturn was primarily attributed to surging finance costs, exacerbated by the persistent devaluation of the Naira.
However, the multinational food and beverage giant staged an impressive rebound in the final quarter of 2024, posting a profit after tax (PAT) of N19.676 billion, a remarkable turnaround from the N36.406 billion loss recorded in Q4 2023.

Despite the significant loss, Nestlé Nigeria reported robust revenue growth, with full-year revenue soaring 75.25% YoY to N958.815 billion. T

his growth was predominantly fueled by strong domestic demand, underscoring the resilience of the company’s brands in a challenging macroeconomic landscape.
Export sales also saw a notable uptick, rising to N6.6 billion in 2024 from N1.2 billion in the prior year, reflecting strategic efforts to diversify revenue streams.
Highlight of the financial performance for the full year ended December 31, 2024, reveal a complex picture of robust revenue growth countered by escalating finance costs and mounting losses. The company’s revenue surged by 75.25% year-on-year (YoY) to N958.815 billion, driven by strong domestic demand and strategic market expansions. However, this impressive top-line growth was tempered by a 97.75% YoY increase in the cost of sales, which climbed to N652.460 billion, significantly compressing profit margins.
The multinational conglomerate recorded a 41.06per cent year-on-year increase in gross profit, reaching N306.355 billion, reflecting sustained operational efficiency. However, rising operational costs pressured the bottom line. Marketing and distribution expenses rose by 44.82per cent YoY to N106.852 billion, while administrative expenses surged by 58.34per cent YoY to N32.530 billion. Consequently, operating profit growth lagged behind revenue expansion, increasing 35.62% YoY to N167.876 billion.
Despite a commendable operational performance, Nestlé Nigeria faced an overwhelming rise in finance costs, which soared by 68.23per cent year-on-year to N392.832 billion. The devaluation of the Naira and increased borrowing costs contributed significantly to these escalating expenses. Total borrowing climbed by 62.48% year-on-year to N653.702 billion, further straining financial stability.
As a result, the company reported a loss after tax of N164.595 billion, representing a 107.11% increase year-on-year. Loss per share also mirrored this trend, standing at N207.65, reflecting deepening financial distress.
Consequently, the company’s liquidity position weakened substantially, with cash and cash equivalents plummeting 86.50per cent YoY to N22.642 billion, raising concerns over its ability to meet short-term obligations. Meanwhile, total assets expanded by 47.60% YoY to N858.698 billion, reflecting continued investments. However, shareholders’ funds remained in negative territory at -N92.290 billion, despite an 18.27% YoY improvement.
Nestlé Nigeria’s financial trajectory underscores the pressing need for strategic cost management and financial restructuring. While revenue growth remains strong, the company must address escalating finance costs and liquidity pressures to restore investor confidence and ensure long-term profitability.
As 2025 unfolds, key priorities will include optimizing operational efficiencies, strengthening foreign exchange risk management, and potentially exploring capital restructuring to mitigate rising debt burdens. The company’s stock closed at N975.00 per share on February 26, 2025, posting an 11.4% gain but still reflecting a 20.5% loss in 2024
Nestlé Nigeria’s CEO, Wassim Elhusseini, acknowledged the mounting economic pressures that impacted the company’s performance, particularly the rising finance costs linked to foreign exchange losses.
“Our 2024 results demonstrate the resilience of our brands and teams despite the tough business environment. The impressive 75.2% revenue growth and 35.6% increase in operating profit to N167.9 billion highlight our strong operating performance,” Elhusseini stated.
He further emphasized that the Q4 2024 return to profitability was a key milestone, as the company reversed a prior-year loss with a net profit of N19.7 billion.