NESTLÉ’S Nigeria Plc has recorded a Profit-After-Tax (PAT) of N21.7 billion for the first half (H1) of year 2021, preceding year’s figure of N21.8 billion.
Nestle has, however, retained the strength of recovering sales revenue. According to the company’s financial statement, year-to-date position at half-year ended June 2021 shows a turnover of over N171 billion. This is an increase of 21 per cent on the sales front, a sustaining upturn from flat growth in turnover in 2020 and a seven per cent increase in 2019.
Marketing/distribution expenses grew rapidly in the second quarter, pushing up the half-year position to an 18 per cent increase to N23.5 billion. Administrative expenses closed flat at N6.6 billion at the end of June 2021. Operating profit grew by less than six per cent to N36 billion over the review period.
Net finance expenses maintained an upward run at half a year as finance income dropped and finance expenses grew rapidly. At N2.9 billion, net finance cost multiplied more than six times year-on-year at the half-year, which led to a decline in profit.
Analysts observe that there are signs that the company has stumbled into a widening debt hole which represents an over 700 per cent rise in the corporate debt size year on year (Y-o-Y).
The spike in the company’s debt will continue to squeeze profitability if the management does not find ways to roll back its short-term commercial borrowings, analysts said.
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