Nigeria: Nestle’s improved revenue lifts profit by 6% to N46bn, proposes N45 final dividend

Mar 03, 2020
Nigeria’s biggest food company by market value, Nestle Nigeria Plc has reported a 6% leap in its after-tax profit for Full Year 2019.
 
This and other details are contained in its Annual Report and Financial Statements 31 December 2019 posted on the website of the Nigerian Stock Exchange today.
 
Nestle’s Revenue appreciated by 6.7%, climbing from N266.275 billion at FY2018 to N284.035 billion in the relative period of 2019.
 
Profit Before Income Tax (PBIT) jumped from N59.791 billion at FY2018 to N71.124 billion at FY2019, implying a 19% growth.
 
Nestle’s Profit for the year expanded by 6.2% from N43.008 at FY2018 to N45.683 billion in the same period last year.
 
Earnings Per Share (EPS) grew from N54.26 at FY2018 to N57.63 at FY2019, translating to a 6.2% increase.
 
Despite the largely impressive result, Nestle’s operational efficiency worsened slightly in between the periods particularly its Marketing and Distribution Expenses, which ramped up from N43.490 billion at FY2018 to N46.077 billion in the period under review.
 
Management should contemplate reducing its expenditure in this area in order to post better results in the years ahead.
 
Also remarkable is the expansion in Nestle’s Total Assets from N162.334 billion at FY2018 to N193.374 billion in the equivalent period of 2019, translating to 19.1%.
 
However, Total Equity plunged by 9.2%, falling from N50.220 billion at FY2018 to N45.558 billion at FY2019.
 
In view of the generally commendable result, the Nestle hierarchy is proposing a final dividend payment of N45 per share subject to shareholders’ approval.
 
The final dividend brings the total dividend declared by Nestle for FY2019 to N70 given that it had earlier declared an interim dividend of N25 per share last year.
 
With outstanding shares of 792,656,252, its market capitalisation is currently in the neighbourhood of N895.702 billion.
 
Nestle’s dividend yield is 6.24% while its Price to Earnings (PE) ratio is 17.65. According to Simply Wall Street, Nestle is trading above its fair value.
 
Nestle opened trade today on the floor of the NSE at N1,130 per share
 
Earnings Per Share is the profit that each unit of a company’s ordinary shares  yields  during a particular period. It is simply calculated by dividing the Profit After Tax by the company’s total outstanding shares.  Increase in a company’s EPS often reflects an improvement in its bottom-line while a fall, on the other hand, indicates a declining profit.
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