Nestle PLC has released its second quarter showing its revenue surged by 22%. Gross revenue for the period was rose to NGN80,4 billion from NGN65,9 billion recorded last year.
The company’s cost of sales rose from NGN47,7 billion to NGN37,2 billion spent last year.
The Nestle’s marketing and distribution spend has also gone up to NGN12,8 billion compared to NGN10,8 billion last year.
Nestle’s net profit however fell by 94% to NGN535 million compared to NGN8,8 billion recorded within the same quarter last year. The major reason behind the huge slump in its profit is the 361% increase in its finance costs to NGN14 billion compared to last year’s cost on the same item at NGN2,9 billion.
Commenting on the result, Nestle issued a message saying:
“We are pleased that our revenue increased by 22% 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% 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”.
Unilever PLC, one of Nestle’s competitor bounced back from a NGN504 million net loss last year to NGN52 million net profit for the second quarter this year.
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