Nestlé’s interim financial report for Q1 ended March 2023, shows that interest bearing debts have continued swelling from less than N77 billion in 2021 to over N155 billion at the end of 2022 and further to the region of N173 billion at the end of the quarter.
The adverse movements in finance cost and income resulted in an adverse shift from net finance income of N1.4 billion to net finance cost of N3.7 billion over the period — which directly accounted for the company’s loss of profit in the quarter.Cost of finance was one of the two major cost increases that squeezed the company’s profit margin and slowed down profit growth last year at an increase of 70 percent to N20.5 billion.
The second major expense line that pressured the company’s earnings in Q1 was marketing and distribution cost — which grew more than twice ahead of sales revenue at 35.9 percent to N19.3 billion at the end of the quarter.Sales revenue grew by 16.1 percent quarter-on-quarter to almost N128 billion at the end of Q1, slowing down from an outstanding increase of 27 percent for the 2022 full year.
The slowdown in input cost strengthened gross profit — which grew ahead of sales at 19.5 percent to close at N51.6 billion at the end of March 2023. This represents an increase of N8.4 billion in gross profit, much of which was however claimed by the incursion from marketing and distribution cost.
Belgique Dernières Nouvelles, Belgique Actualités
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