Nestlé Nigeria Plc has announced the early repayment of $20 million in inter-group foreign exchange debt, a move aimed at reducing its exposure to currency volatility and strengthening its financial position. The repayment, disclosed in a filing on the Nigerian Exchange on Thursday, February 28, 2025, comes as the company continues to navigate economic challenges, including currency devaluation, inflation, and rising finance costs.
Financial Discipline Amid Economic Headwinds
Wassim Elhusseini, Managing Director and Chief Executive Officer of Nestlé Nigeria, highlighted the significance of the early repayment, stating, “Our ability to make an early payment of $20 million on our forex obligations underscores the strength of our financial discipline and our commitment to reducing exposure to currency volatility. Despite the economic headwinds, we continue to make strategic investments and optimize our operations to ensure long-term value creation for our stakeholders.”
The company’s proactive approach to managing its forex obligations is expected to reduce interest expenses and mitigate risks associated with currency fluctuations.
Return to Profitability in Q4 2024
Nestlé Nigeria’s financial performance showed signs of recovery in the fourth quarter of 2024, with the company reporting a profit after tax of N19.7 billion, a significant improvement compared to the N36.4 billion loss recorded in the same period of 2023. This turnaround was driven by a 95% increase in total revenue to N293.5 billion and a 77.1% growth in operating profit to N57 billion for the quarter.
For the full year 2024, Nestlé Nigeria’s revenue surged by 75.2% to N958.8 billion, while operating profit rose by 35.6% to N167.9 billion. However, the company reported a total comprehensive loss of N14.6 billion, largely attributed to high finance costs resulting from the depreciation of the naira.
Strategic Investments and Workforce Expansion
Despite the challenging economic environment, Nestlé Nigeria has continued to invest in its operations to drive growth and improve efficiency. Since 2023, the company has committed N132 billion to capacity expansion and operational improvements, including N72 billion in 2024 alone. Additionally, Nestlé Nigeria increased its workforce by 8% to support growth across its product portfolio.
Commitment to Long-Term Growth
Elhusseini reaffirmed the company’s commitment to operational efficiency and innovation, stating, “Our investments in capacity expansion, workforce development, and product innovation will position us for sustained growth. We remain focused on navigating economic challenges while continuing to deliver value to our consumers and shareholders.”
Gbenga Oyebode, Chairman of Nestlé Nigeria, previously emphasized the necessity of foreign exchange loans from its parent company, Nestlé S.A. Switzerland, to keep the business operational amid Nigeria’s economic challenges.
Key Takeaways
– Nestlé Nigeria repaid $20 million in forex debt ahead of schedule to reduce currency volatility risks.
– The company returned to profitability in Q4 2024, with a profit after tax of N19.7 billion.
– Full-year revenue rose by 75.2% to N958.8 billion, but high finance costs led to a total comprehensive loss of N14.6 billion.
– Nestlé Nigeria has invested N132 billion since 2023 to expand capacity and improve efficiency.
– The company remains committed to long-term growth through strategic investments and operational optimization.
Nestlé Nigeria’s early repayment of forex debt and its focus on strategic investments demonstrate its resilience and commitment to navigating Nigeria’s challenging economic landscape while delivering value to stakeholders.
