Nestlé Nigeria Plc grew its revenue by 22% in the first half of the year, according to the Unaudited Financial Statements for the period ended 30 June 2021 released by the company.
Despite over N30 billion increase in revenue, the profit for the period declined by N93.37 million compared to the profit in H1 2020 due to increased cost of sales, operating costs and finance costs.
Income statement
Nestlé Nigeria Plc revenue rose to N171.44 billion in H1 2021 from N141.32 billion reported in H1 2020.
98.72% or N169.25 billion of the revenue were realized in Nigeria while the rest were from exports.
The gross profit increased to N66.43 billion from N60.84 billion in H1 2020. The gross margin drooped to 38.75% in H1 2021 from 43.14% recorded in H1 2020.
The company’s marketing and distribution expenses increased by over N3 billion to N23.49 billion in H1 2021 but the administrative expenses remained relatively unchanged at N6.61 billion.
The finance cost soared by 262.15% to N3.39 billion in H1 2021 from N937.36 million in H1 2020.
Due to the rise in the marketing and distribution expenses, coupled with surge in finance cost, the company’s profit before income tax dropped to N33.38 billion in H1 2021 from N33.86 billion in H1 2020.
Nestlé Nigeria Plc paid income tax of N11.65 billion in H1 2021. Thus the profit after tax settled at N21.73 billion, slightly down from N21.83 billion reported in H1 2020.
The earnings per share also declined to N27.42 from N27.53 in H1 2020.
Balance sheet
The total assets of the company increased by over N16 billion to N262.79 billion as at 30 June 2021 from N246.18 billion as at 31 December 2020.
Current assets represent 64.55% or N169.63 billion of the total assets.
Major components of assets
- Cash and cash equivalents: N88.34 billion (N58.70 billion in 2020)
- Property, plant and equipment: N85.89 billion (N87.265 in 2020)
- Inventories: N49.98 billion (N52.22 billion in 2020)
- Trade and other receivables: N28.47 billion (N39.56 billion in 2020)
On the other hand, total liabilities increased by over N23 billion to N239.95 billion from N216.89 billion as at 31 December 2020. Current liabilities represent 69.97% or N167.90 billion of the total liabilities.
Major components of liabilities
- Trade and other payables: N137.78 billion (N116.51 billion in 2020)
- Long-term Loans and borrowings: N50.84 billion (N33.83 billion in 2020)
- Deferred tax liabilities: N16.13 billion (N11.98 billion in 2020)
- Current tax liabilities: N14.55 billion (N30.48 billion in 2020)
- Contract liabilities: N10.55 billion (N8.65 billion in 2020)
The total equity of the company declined to N22.84 billion from N29.30 billion mainly due to decrease in retained earnings to N22.35 billion from N28.75 billion.
Cash flow
- N50.70 billion was generated from operating activities, up from N26.32 billion generated in H1 2020.
- N1.84 billion was used in investing activities, down from N2.04 billion used in H1 2020.
- N19.23 billion was used in financing activities, up from N5.19 billion used in H1 2020.
Shareholding
Apart from Nestlé S.A, Switzerland, with 533,270,982 ordinary shares (representing 67.28%) and Stanbic IBTC Nominees Limited with 5.99%, no other shareholder held 5% or more of the paid-up capital of the Company as at 30 June 2021.
The share price of Nestlé Nigeria Plc closed flat at N1540.00 per share on Thursday on the floor of the Nigerian Exchange.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.