Nestlé Nigeria Plc delivered a strong first-half performance for 2026, posting double-digit revenue growth, higher profitability and a significantly stronger balance sheet, even as the company announced plans to transfer its water business into a new global joint venture being created by its majority shareholder, Nestlé S.A., and private equity firm Platinum Equity.

The company reported revenue of N650.76 billion for the six months ended June 30, 2026, representing 12 percent increase from N581.12 billion recorded in the corresponding period of 2025.

Profit after tax rose 28 percent to N64.78 billion, compared with N50.57 billion a year earlier, while profit before tax climbed 43 percent to N126.77 billion from N88.39 billion, reflecting stronger operating performance, improved finance income and disciplined cost management.

The results extend Nestlé Nigeria’s earnings recovery, with the company recording its seventh consecutive profitable quarter since returning to profitability in the fourth quarter of 2024 after weathering severe foreign exchange losses during the height of Nigeria’s currency volatility.

The half-year performance also strengthened the company’s financial position, with shareholders’ equity rising sharply to N77.6 billion as of June 30, 2026, from N12.9 billion at the end of December 2025. The improvement signals a continued rebuilding of the balance sheet following the erosion of equity caused by exchange-rate losses in previous years.

Operating profit increased by 8 percent to N141.36 billion, up from N130.44 billion in the first half of 2025, while gross profit expanded to N258.52 billion from N224.95 billion despite higher production costs.

Cost of sales rose to N392.24 billion, reflecting persistent inflationary pressures and higher input costs, but revenue growth enabled the company to sustain healthy margins.

A major driver of the stronger bottom line was the sharp improvement in net finance costs. Finance income surged to N33.26 billion from N1.12 billion in the corresponding period of 2025, while finance costs increased modestly to N47.86 billion from N43.17 billion. Consequently, net finance costs narrowed significantly to N14.60 billion, compared with N42.05 billion a year earlier, helping lift pre-tax earnings by 43 percent.

Alongside the earnings announcement, Nestlé Nigeria disclosed in a regulatory filing to the Nigerian Exchange Limited that its water business will become part of Peranel, a new 50:50 global joint venture being established by Nestlé S.A. and Platinum Equity to manage the multinational’s waters and premium beverages portfolio.

The transaction, which remains subject to regulatory approvals and shareholder ratification, is expected to close in the first half of 2027.

Under the proposed arrangement, Nestlé Nigeria’s existing water business will be transferred to the joint venture for adequate consideration after obtaining the necessary local approvals. However, the company emphasised that the restructuring will not affect Nestlé S.A.’s shareholding in Nestlé Nigeria or the company’s listing on the Nigerian Exchange.

“The proposed transaction does not affect or alter the shareholding of Nestlé in Nestlé Nigeria,” the company said, adding that shareholders would be kept informed as the transaction progresses.

The restructuring forms part of Nestlé S.A.’s broader strategy to sharpen its focus on faster-growing business segments while creating a dedicated global platform for its water and premium beverage operations.

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Peranel will combine more than 30 brands across 120 countries, making it one of the world’s largest premium hydration businesses. Its portfolio will include internationally recognised brands such as San Pellegrino, Perrier, Acqua Panna and Nestlé Pure Life, alongside several leading local water brands. The new company will be headquartered in Paris and led by Muriel Lienau, the current chief executive of Nestlé’s waters and premium beverages business.

For Nigeria, the transaction is expected to change only the ownership structure of the water business, leaving Nestlé Nigeria’s broader food and beverage operations intact. Analysts, however, say investors will closely watch the financial impact of the transfer on the company’s future revenue mix and earnings profile once the transaction is completed, particularly as the financial consideration for the Nigerian assets has yet to be disclosed.

Commenting on the half-year performance, Managing Director and Chief Executive Officer, Wassim Elhusseini, said the results reflected the resilience of the company’s brands and disciplined execution.

“Our performance in the first half of 2026 demonstrates continued progress in strengthening the fundamentals of our business. The delivery of a seventh consecutive quarter of profitability since our return to profit in Q4 2024, alongside 12 percent revenue growth and profit after tax of N64.8 billion, reflects the resilience of our brands, the discipline of our execution and the commitment of our people,” he said.

“We remain optimistic about the outlook and will continue to pursue sustainable, profitable growth with focus and prudence.”

Nestlé Nigeria said it would continue to deepen consumer relevance through innovation and renovation, strengthen margin management and operational efficiency across its value chain, and make targeted investments to support long-term brand growth while maintaining commitments to its workforce, host communities and sustainability initiatives.

The combination of stronger earnings, a significantly improved equity position and the strategic reorganisation of its water business marks an important phase in Nestlé Nigeria’s recovery and broader transformation, as investors assess both the company’s operating momentum and the long-term implications of the global restructuring.