Nestlé Nigeria’s turnaround
strategy continued to deliver strong results in the third quarter of 2025, with
massive foreign exchange losses recorded in the same period last year reversing
into gains.
The food and beverages giant
posted foreign exchange gains of ₦20.7 billion in the third quarter, compared
with exchange losses of over ₦285 billion a year earlier. This dramatic shift
reduced net finance expenses from more than ₦366 billion to ₦53 billion,
supporting profit growth for the fourth consecutive quarter since the company
returned to profitability in the final quarter of 2024.
According to its interim
financial report for the quarter ended September 2025, Nestlé Nigeria recorded
an after-tax profit of nearly ₦22 billion in the third quarter, bringing
cumulative profit for the nine-month period to ₦72.5 billion.
Revenue Growth Moderates, Cost
Discipline Offsets Pressure
Sales revenue growth slowed in
the third quarter, rising 17.4 per cent year-on-year to ₦303.4 billion,
compared with a 43 per cent increase to ₦581 billion recorded at the half-year.
However, the impact of slower sales growth was mitigated by tighter cost
controls.
Cost of production increased by a
slower 12.4 per cent year-on-year to ₦201.5 billion in the quarter, helping
gross profit rise by 29 per cent to about ₦102 billion. Much of the gain,
however, was absorbed by higher operating expenses.
Marketing and distribution
expenses surged by 73.4 per cent to ₦38 billion, while administrative costs
rose by 40 per cent to over ₦13 billion. Together, these increases accounted
for nearly ₦20 billion of the under-₦23 billion rise in gross profit during the
quarter.
As a result, operating profit
grew modestly by 6.6 per cent to just under ₦51 billion in the third quarter.
Finance Cost Reduction Drives
Profit Rebound
The company regained operating
momentum through a sharp reduction in finance expenses following the shift from
foreign exchange losses to gains. Net finance cost for the quarter dropped
significantly from ₦50.6 billion to just above ₦11 billion.
This cost saving powered a strong
earnings recovery, turning a loss of ₦7.4 billion in the third quarter of 2024
into an after-tax profit of nearly ₦22 billion in the corresponding period of
2025.
Strong Nine-Month Performance
For the nine-month period, Nestlé
Nigeria recorded sales revenue of ₦884.5 billion, representing a 33 per cent
year-on-year increase. Growth was supported by slower cost escalation, with
cost of production rising 21.5 per cent to ₦557.7 billion.
Gross profit surged by almost 57
per cent to approximately ₦327 billion. Despite elevated operating expenses,
management kept overall cost growth in check, allowing operating profit to
improve by 63.6 per cent year-on-year to ₦181 billion as of September 2025.
The sharp decline in finance
expenses extended operating gains, resulting in a robust turnaround. After-tax
profit for the nine-month period stood at ₦72.4 billion, a significant rebound
from a net loss of more than ₦184 billion recorded in the same period last
year.
Outlook and Balance Sheet
Recovery
Nestlé Nigeria is projected to
close the 2025 financial year with a bottom line of approximately ₦94 billion.
The company’s equity position
also continued to improve, with negative equity narrowing sharply from over ₦92
billion at the end of 2024 to ₦19.7 billion at the end of the third quarter.
Earnings per share for the third
quarter came in at ₦91.44, a strong recovery from a loss of ₦232.47 per share
in the corresponding quarter of 2024.
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