Nestlé Nigeria posts N64.8bn half-year profit as FX gains rises

…equity surges six-fold to N77.6bn after seventh straight profitable quarter

Nestlé Nigeria Plc has reported a 28 percent increase in half-year profit to N64.78 billion, as foreign exchange gains, steady consumer demand, and tighter cost management helped the food and beverage maker erase more than half of its accumulated losses and rebuild shareholders’ equity.

An analysis of the company’s unaudited financial statements for the six months ended June 30, 2026, shows that Nestlé has now delivered its seventh consecutive profitable quarter since returning to profitability in the fourth quarter of 2024, marking one of the strongest recoveries among Nigeria’s listed consumer goods companies.

The company’s accumulated losses narrowed sharply from N112.78 billion at the end of December 2025 to N48.00 billion in June 2026, while shareholders’ equity rose more than sixfold to N77.56 billion from N12.89 billion over the same period.

The improvement comes after two years in which manufacturers battled severe foreign exchange losses, inflationary pressures, and soaring borrowing costs following Nigeria’s currency reforms.

Nestlé’s revenue rose 12 percent to N650.76 billion from N581.12 billion recorded in the corresponding period of 2025, driven by continued demand across its food and beverage portfolio, while operating profit increased by 8 percent to N141.36 billion.

Profit before tax increased 43 percent to N126.77 billion from N88.39 billion a year earlier, while profit after tax increased to N64.78 billion from N50.57 billion. Earnings per share also improved to N81.72 from N63.80.

A major driver of the earnings growth was a sharp improvement in finance income, which surged to N33.26 billion from N1.12 billion in the previous year following foreign exchange translation gains. This significantly reduced the company’s net finance cost to N14.60 billion from N42.05 billion despite finance expenses remaining elevated at N47.86 billion.

The financial statements show unrealised foreign exchange gains of over N32 billion contributed to finance income during the period, underscoring the impact of improved exchange rate stability compared with the previous year.

The company’s margins also remained resilient despite inflationary pressures.

Gross profit increased 15 percent to N258.52 billion from N224.95 billion, although higher spending on marketing, distribution and raw materials reflected continued investments to defend market share and maintain product availability. Marketing and distribution expenses rose to N93.55 billion from N73.68 billion, while administrative costs increased to N24.24 billion from N21.47 billion.

Nestlé also continued expanding exports within West Africa. While Nigeria remained its dominant market, generating N641.02 billion in sales, export revenue nearly tripled to N9.74 billion from N3.59 billion a year earlier, with Ghana and Côte d’Ivoire contributing to regional growth.

The balance sheet also reflected improving financial strength. Interest-bearing borrowings declined to N445.01 billion from N476.04 billion at the end of 2025, while total liabilities fell to N769.87 billion from N833.27 billion.

However, cash reserves reduced significantly to N5.62 billion from N35.42 billion six months earlier, largely reflecting loan repayments, capital expenditure and tax payments during the period.

Commenting on the results, Wassim Elhusseini, managing director and chief executive officer of Nestlé Nigeria, said the company remained focused on strengthening the fundamentals of the business.

“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.

He added that the company would continue to focus on innovation, improving operational efficiency, strengthening margins, and making targeted investments while remaining responsive to changing macroeconomic conditions.