Nestle Nigeria has announced a profit after tax of N6.68 billion for the first quarter ended March 31, 2016, an increase of 126 per cent when compared to N2.95 billion recorded in the same period of 2015.
The company’s revenue stood at N36.1 billion, up 31 per cent when compared to N27.5 billion recorded in the corresponding period of 2015.
According to the result presented to the Nigerian Stock Exchange, the company total equity stood at N44.8 billion, an appreciation of 18 per cent from N38.0 billion it recorded in 2015 first quarter.
The company had declared a total dividend of N22.99 billion for the 2015 business year as the food and beverage giant muscled operating challenges to sustain growth across key indices.
The board of directors of Nestle Nigeria has recommended a final dividend of N15.06 billion, representing a dividend per share of N19. The company had earlier paid an interim dividend per share of N10, bringing total dividend for the year to N22.99 billion or N29 per share.
Key extracts of the audited report and accounts of Nestle Nigeria for the year ended December 31, 2015 showed improved performance across the top-line and the bottom-line. Total turnover rose to N151.272 billion in 2015 compared with N143.329 billion in 2014. Gross profit stood at N67.346 billion, up from N61.22 billion. Marketing and distribution expenses followed the same upward trend, rising from N24.7 billion to N25.9 billion, while administrative expenses rose from N7.34 billion to N7.693 billion.
However, finance cost fell from N5.305 billion to N4.868 billion. The drop in finance cost bolstered the bottom-line of Nestle Nigeria, which ended the year with a profit before tax of N29.322 billion, up from N24.445 billion. Profit after tax grew from N22.236 billion in 2014 to N23.736 billion in 2015.
Market analysts commended the performance of Nestle Nigeria, noting that the company has proven to be resilient over the years.
Analysts at FBN Capital Limited noted that Nestle Nigeria’s top-line recovery, which began in second quarter of 2015, has been sustained for three consecutive quarters.
“We believe this is helped by continued product reformulation, an improved sales distribution network and relatively higher switching costs for the food category,” FBN Capital stated.
Analysts pointed out that Nestle Nigeria’s low reliance on imported raw materials continues to keep gross margin at healthy levels.
“We believe consumer goods firms will struggle given the continued macroeconomic headwinds. Although the security in the North East is a lot better today, a combination of a higher inflationary environment, slower economic growth and lower disposable income would be major themes in 2016,” FBN Capital stated.