WorldStage Newsonline– Nestle Nigeria has released its second quarter 2024 (Q2-24) unaudited results with a lower pre-tax loss of N56.44 billion from N94.02 billion loss in Q2-23 while loss after tax dropped to N34.23 billion from N66.19 billion loss in Q2-23.
Revenue advanced by 67.0% y/y in Q2-24 (H2-24: +55.5% y/y), driven by strong performance in Nestle’s Food (+68.8% y/y | 64.3% of revenue) and Beverages (+64.0% y/y | 35.7% of revenue) segments, reflecting consumer’s resilient demand for Nestle’s products.
Average prices in the food and beverage segments increased by 12.6% y/y and 15.3% y/y, respectively, during the period as Nestle’s export revenue also saw a significant increase, growing by 14.7x y/y to NGN1.89 billion from N120.44 million in Q2-23, although domestic revenue continued to dominate, comprising 99.2% of the total revenue. Sequentially, on a quarter-on-quarter basis, revenue grew by 21.8% reflecting increases across the Food (+22.7% y/y) and Beverages (+20.2% y/y) segments.
Moreover, gross profit margin contracted by 661bps y/y to 35.0% in Q2-24 (H2-24: -972bps y/y to 31.3%), due to the heightened cost of sales (+85.9% y/y) driven by inflationary pressures on domestic food prices. Notably raw material costs increased by 90.5% y/y in the period.
Consequently, EBITDA and EBIT margins both contracted, falling to 23.3% (-280bps y/y) and 18.9% (-516bps y/y), respectively, amid a 53.7% y/y rise in operating expenses.
Nestle also reported a 21.8% y/y decrease in net finance cost to NGN98.60 billion in Q2-24 from N126.16 billion in Q2-23, owing to a 21.8% y/y decrease in its finance cost.
This reduction was primarily driven by a 39.5% y/y decline in exchange loss, despite a 238.4% y/y increase in interest expenses on interest-bearing loans and borrowings (+62.5% YTD to N653.92 billion) in the period.
With the result, the company reported a lower loss per share of N43.18 from N83.50 in Q2-23 translating to a loss per share of N223.19 in H1-24 against loss per share of N63.06 in H1-23.
