By Chinenye Anuforo and Vera Wisdom Bassey
Shareholders of Nestle Nigeria Plc would soon be smiling to the bank as the board of the company has proposed an interim dividend of N15.00 per share.
The company’s management also assured the company’s stakeholders of sustained returns on investments, quality products and sustained contribution to physical and health being through healthy products.
The new Managing Director, Mr. Mauricio Alarcon, gave the assurance at the Nigerian Stock Exchange (NSE), where he sounded the exchange’s closing bell last week.
The visit by the company’s management team coincided with the release of its third quarter 2017 result, which showed growth in key performance measuring indices.
Mauricio, said ‘it wouldn’t be more appropriate to be here at this time, as it is also encouraging to present our Q3 result this period.” He said that the company’s performed well in the Q3 period, due to the workability of its strategy, adding that the N15 interim proposed by the company demonstrates commitment to reward on shareholders investments.
The MD said that Nestle is focused on its vision to improve the quality of life all the stakeholders and that of the people through sustainable production of healthy products and profitability to reward investors “we produce nutritious products.”
However, the company’s result for Q3 2017 released by the NSE,showed that Q3 sales and PBT grew by 29 per cent y/y; and 117 per cent y/y to N63.3billion and N10.0bn, respectively. However, the company’s profit after tax (PAT) grew to N6.4bn, against a loss after tax of –N51million in the same Q3 period of 2016.
PAT came in at N10.0bn compared with a loss after tax of –N51million in the corresponding period of 2016. Topline y/y growth continues to benefit from double-digit price increases which occurred in Q4 2016 mainly. Similar to Q2, Q3 profitability was boosted by a gross margin expansion of 433bps y/y to 43.5%, which primarily attributed to relatively cheaper access to fx for imports.
The big downside to this set of numbers was an fx loss of –N6.0bn in Q3 (-N11.2bn in 9M 2017), which compares with an fx-related loss of –N6.3bn in Q3 2016, a -N19.4bn reported in 9M 2016. This fx loss was, however, not sufficient enough to offset gains coming through from top line growth and the gross margin expansion. Sales for both Nestle’s Food and Beverage categories were up by around 28 per cent y/y to N39.1bn and N24.2bn respectively. While sales were up 4.2 per cent q/q, PBT came in flattish, mainly on the back of the reported fx loss of –N6.0bn, which compares with –N4.1bn in Q2. PAT declined -22 per cent q/q, due to a comparatively higher tax expense in Q3.