Nestle Nigeria reported a net loss of N164.6 billion for the 2024 financial year, representing a 107 percent increase in losses compared to the N79.5 billion loss recorded in 2023.
Despite achieving record revenues of N958.8 billion, the company faced a 48 percent rise in operating expenses, which climbed to N139.4 billion from N94.3 billion in 2023. This resulted in an operating profit of N167.9 billion, with the operating margin for 2024 at 17.5 percent, a notable decrease from 22.6 percent in the previous year.
The increase in net finance costs to N389.5 billion, a 71 percent rise from N227.8 billion in 2023, was driven by elevated interest rates in Nigeria and the devaluation of the Naira.
In terms of revenue, Nestle achieved N958.8 billion in 2024, reflecting a 75 percent increase from N547.1 billion in 2023. However, the cost of sales surged by 98 percent to N652.5 billion, up from N329.9 billion the previous year, resulting in a gross profit of N306.4 billion, which is a 41 percent increase from N217.2 billion in 2023. The gross margin for 2024 was 32 percent, down from 40 percent in 2023.
The rise in net finance costs was attributed to interest expenses, which soared to N102.1 billion, a 166 percent increase from N38.4 billion in 2023. Additionally, net foreign exchange losses rose to N290.7 billion, with only N57.6 billion of that amount being realized.
Nestle's financial difficulties have negatively impacted its net assets, which now stand at a negative N92.3 billion, compared to negative N78 billion in 2023. While total assets increased to N858.7 billion, current assets saw a slight decline of 1 percent to N358.3 billion from N361.2 billion in the previous year.
The current ratio fell to 0.89 from 1.24 in 2023, indicating a deeper level of indebtedness for the company. Total borrowings rose significantly by 62 percent to N653.7 billion, up from N402.3 billion at the end of the 2023 financial year.
In 2024, Nestle conducted a revaluation of its fixed assets, resulting in a revaluation gain of N150 billion reflected in its net assets. An independent assessment performed on February 29 determined that the fair value of Nestle’s assets was approximately N305.5 billion, a significant increase from the prior valuation of N91.1 billion.