Nestle Grows Revenue by 20% in 2016

By Modupe Gbadeyanka

Despite the challenging operating environment it operated in 2016 and softer consumer demand due to rising inflation in the country as well as foreign exchange crisis that punctured Nigeria’s economy, Nestle Nigeria Plc managed to grow its revenue by 20 percent.

In the audited financial report released by the company today to the Nigerian Stock Exchange (NSE), it was disclosed that Nestle grew its profit to N182 billion in 2016 from N151 billion it recorded in 2015, when the environment was still favourable.

The rise, according to Nestle, is a confirmation of the strong patronage its brands continue to enjoy among Nigerian consumers as it helps them to live happier and healthier lives.

Also, the gross profit of the company moved from N67 billion it recorded in 2015 to N75 billion in 2016.

However, its profit before tax fell from N29 billion achieved in 2015 to N21.5 billion it posted in the year under review.

Similarly, its profit for the year stood at N7.9 billion compared with N23.7 billion it recorded in 2015.

The profit after tax has been negatively impacted both by the revaluation of foreign loans resulting from the devaluation of the Naira and higher income tax provisions due to the expiration of the pioneer status.

Notwithstanding, the increase in the cost of sales and operating expenses due to rising input costs and currency devaluation, operating profit increased by 13 percent.

This was made possible through internal cost saving initiatives, operating efficiency and pricing management.

The board and the management of Nestle, Business Post learnt, remain optimistic about the long term potential of the business in spite of the current tough macroeconomic environment.

The company says it will continue to increase investment in the key brands and route-to-market activities while proactively managing input cost pressures.

Meanwhile, the company has proposed a dividend of N10 per share.