The share price of Nestle Nigeria Plc, a major fast moving consumer goods company in the country, rose by 6.52 percent on Tuesday following the release of its half-year financial results showing a profit after tax growth of 29.6 percent at N21.4 billion and a revenue growth of 10.9 percent at N135 billion.
The announcement, which sparked demand for the stock moved its share price to close at N1,600 as the company amassed a trading volume of 904,042 to the value of N1.3 billion.
Mauricio Alarcon, group chief executive officer at Nestle Nigeria Plc. in his comments on the results said: “We are pleased with the sustained growth of our Company amid the tough competitive business landscape. These results were possible due to the relentless efforts of our highly passionate team to provide high quality and affordable nutritious food and beverages to Nigerian consumers.”
He further added, “We will maintain the focus on delighting consumers with our nutritionally superior products by increasing promotion initiatives and providing more nutrition education. In line with our Creating Shared Value principle, we remain committed to building thriving and resilient communities through local sourcing, expanding the commercialization of our products and strengthening our value chain.”
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Speaking on the performance of the company, analysts at Cordros Capital suggest foreign exchange gain helped overshadow finance cost, “Net finance income of N300 million was recorded in Nestle’s Q2 2018. They also recorded foreign exchange gain of N590 million more than offset interest expense of NGN550 million, as the balance of borrowings reduced by a further N630 million to NGN17.5 billion compared to N42.99 billion in half-year period of 2017. Following the result, and with the risk of foreign exchange volatility muted, we now model finance cost will be much lower at N2.6 billion in 2018, from N4.6 billion previously.”
Frontpage September 17, 2019