The devaluation of the naira has negatively impacted on the profit of one of the largest food and beverage companies in Africa, Nestlé Nigeria Plc, resulting in a loss of N79.5 billion for the 2023 financial year, despite recording sales increase of 22.4% over the previous year, with earnings of N547.1 billion, an increase of N100.2 billion over 2022.
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According to the full-year financial results for 2023 released by the company yesterday, the devaluation of the naira in 2023 led to a revaluation of its foreign currency obligations, negatively impacting its financing cost and consequently the profit after tax.
The company which reported a foreign exchange loss of N195bn, recorded a loss before tax of N104bn compared to a pretax profit of N71bn in 2022.
The document also revealed that gross profit was N217.2bn, representing a 39.4% increase from N155.8bn in 2022. Operating profit increased by 41.2% to N122.7bn, an increase of N35.8bn over 2022.
Managing Director and CEO of Nestlé Nigeria PLC, Mr Wassim Elhusseini, said the company remains optimistic to overcome the current economic difficulties.
“I thank every member of our team for the unwavering commitment and dedication which resulted in the strong revenue growth and operating profit vs 2022 despite the challenging economic environment. The devaluation of the Nigerian Naira in 2023 which led to a revaluation of our foreign currency obligations undoubtedly impacted our financing cost and consequently the profit after tax. However, we remain optimistic of our capacity to overcome the current economic difficulties and emerge stronger,” he said.
The company which acknowledged the effect of the losses, stressed that its total liabilities now exceed its total assets.
“The company made a net loss of N79 billion (2022: net profit N49 billion) for the year ended 31 December, 2023 and as at that date, its total liabilities exceeded its total assets by N78 billion (2022: net asset N30 billion).
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