Nestle Nigeria Reports 326% Profit Growth, Offers N27.50 Final Dividend

Investors are expected on Monday to react positively to shares of food beverages and confectioneries giant- Nestle Nigeria, as the directors Friday presented its audited result for the year ended December 31, 2017, indicating that while sales revenue rose by about a third of prior year, profit after tax recorded three-digit percentile growth.

Also to attract attention is the recommendation by the directors of a final dividend per share of N27.50, in addition to the interim dividend of N15 paid during the year, bringing total dividend to N42.50, retaining a mere N0.05 of the earnings per share of N42.55. At the end of 2016, the board had paid N10 final dividend per share. It must be noted that the N15 interim dividend (comprising N13.00 and n2.00 from the balance of the pioneer profits as at December 31, 2015 and retained earnings for the period respectively.

On Friday, Nestle’s share price fell N42.00, or 2.91% each as it was presented at the close of the trading session
According to the result, revenue grew by 34% from N181.91bn to N244.151bn; out which the food segment remained the biggest contributor at N154.226bn or 63.16%, from N113.377bn in 2016; while the beverage segment yielded N89.925bn from N68.533bn.
By geography, Nigeria contributed the lion’s share of turnover at N241.122bn, as against N180.004bn; followed by Ghana’s N2.648bn from N974.51m.

Cost of sales for the period grew from N106.583bn to N143.28bn; bringing gross profit to N100.871bn, as against the previous N75.327bn.
Marketing and distribution expenses rose from N28.775bn to N35.157bn; just as administrative expenses climbed to N10.015bn from N8.338bn; translating to operating profit of N55.698bn, up from N38.213bn.
Personnel expenses rose to N22.758bn from N20.817bn; the bulk of which was salaries, wages and allowances of N11.322bn from N10.967bn; followed by other personnel expenses of N5.754bn, up from N4.058bn.

Finance income climbed to N6.239bn from N4.199bn, being interest income on bank deposits; just as interest expense on financial liabilities fell to N3.94bn from N4.577bn; net foreign exchange loss dropped from N16.286bn to N11.168bn; bringing finance costs to N15.109bn from N20.864bn. This brought net finance cost to N8.869bn, up from N16.664bn.

Profit before tax therefore closed 117% higher from N21.548bn to N46.828bn; while income tax expense was flat at N13.104bn, as against the N13.623bn reported in 2016; while profit after tax grew by 326% from N7.924bn to N33.723bn, out of which the directors have proposed a dividend of N19.816bn for shareholders’ approval at the annual general meeting, up from N15.07bn.

http://investdata.com.ng/2018/03/nestle-nigeria-reports-326-profit-growth-offers-n27-50-final-dividend/