Nestlé Nigeria Plc has announced that its operations for the half year period ended June 30 , 2016 was interrupted when finance costs rose by 361 per cent to impact negatively on profitability.
The multinational company finance costs rose by 361 per cent to N14.89 billion in half year ended July 30, 2016 from N3.2 billion in half year ended July 30, 2015.
The Fast-moving Consumer Goods (FMCG) company said naira devaluation brought down its profit by 92 per cent from N10.6 billion to N896 million in half year ended July 30, 2016.
Although, revenue rose by 22 per cent from N65.9 billion in June 30, 2015 to N80 billion in June 30, 2016 while cost of sales up by 28 per cent to N47.7 billion as against N37.25 billion recorded in half year ended July 30, 2015.
Company Secretary/Legal Adviser, Nestlé Nigeria Plc, Mr. Bode Ayeku, said, “We are pleased that our revenue increased by 22 per cent in the first half of 2016 despite the tough economic environment.
“In both the first and second quarters of 2016, our revenue grew by double digits, thereby confirming the great value that our brands provide consumers. The increase in the cost of sales was mainly due to higher material costs resulting from currency devaluation.
“Operating profit for the period has increased by 10 per cent despite pressure on input costs. Net profit has been negatively impacted by the revaluation of the foreign loans due to Naira devaluation.
The Board and Management will continue to implement necessary measures and cost saving initiatives to address the macroeconomic challenges and remain fully committed to the long term potential of the business in Nigeria,’’ he stated.
Comments are closed.