Business News

Nestle Nigeria reports N104 billion loss in 2023, shareholders funds wiped out

Nestle Nigeria Plc has reported a loss before tax of N104 billion for the year ended 2023 compared to a profit before tax of N71 billion same period in 2022

This is according to the 2023 financial statement of the company published on the NGX on Wednesday, 28th February 2024.

The company reported a foreign exchange loss of N195 billion which was the major reason for the overall loss reported by the company.

The forex losses also resulted in a wipeout of the company’s shareholder funds which is now a negative N78 billion from N30.2 billion a year earlier. This means the company’s liabilities now exceed its assets.

Nestle will also not be able to pay dividends based on the status of its shareholder’s funds.

According to records seen by Naijaonpoint, Nestle has drawn down about $362.25 million in foreign currency loans. The loans were obtained from its parent company Nestle SA.

The company acknowledged the effect of the losses on its going concern status stating as follows

The negative shareholder funds incurred by Nestle will most likely lead to a fresh raise of capital. This is to ensure the going concern status of the company is guaranteed.

According to Naijaonpoint Estimates, Nestle will most likely raise capital over N100 billion to ensure it continues to operate effectively.

Meanwhile, the net cash flow of the company remained positive at N49 billion despite the negative shareholder funds.