Nestle Nigeria Plc bounced back from losses to post an after-tax profit of about N105 billion in 2025, but that’s still not enough to restore the company’s depleted equity capital.
Paying dividends to shareholders is off the table for now, as profits aren’t enough to patch the equity gap in the balance sheet caused by the last two years of losses, but at least the process of closing that gap has started.
The audited financial report for the food and beverages company, covering the full year ended December 2025, shows significant progress in recovering from the losses of N79.5 billion in 2023 and N164.6 billion in 2024.
Accumulated losses tripled from N78.6 billion in 2023 to over N243 billion in 2024, but full profit retention in 2025 cut the deficit down to N112.8 billion. Likewise, equity capital, which had dropped by over N92 billion, bounced back to nearly N13 billion over the same period.
Commenting on the performance results, Wassim Elhusseini, Group Managing Director and CEO of Nestlé Nigeria, expressed confidence that the negative retained earnings will soon be cleared and dividend payments will restart.
Management’s optimism is based on expectations of a more stable business environment that can support profitable operations and potentially boost results in the current financial year and beyond. The operating climate looks promising for achieving sustained profitability, with sales on the rise and exchange losses currently out of the picture.
In 2025, group sales revenue broke into the trillion-naira range, climbing from N958.8 billion in 2024 to N1.21 trillion. The N249 billion boost in revenue gave the company a strong push for a turnaround that year.
Rising export sales and increased investments are great news for the company, helping to boost market share and push sales volume higher.
Management’s push to cut costs is more likely to succeed in a stable operating environment, unlike the uncontrollable exchange rate losses that led to massive setbacks over the past two years.
In 2025, the cost of sales grew more slowly than sales, rising by 18 per cent to about N772 billion compared to a 26 per cent increase in turnover. As a result, the production cost per unit of sales dropped from 68 kobo to just under 64 kobo during the period.
The cost savings from production cost elevated gross profit far ahead of sales revenue at over 42 per cent to stand at close to N436 billion at the end of the year.
The company’s cost efficiency drive however needs to intensify in the field of marketing and distribution cost that grew nearly twice as fast as sales revenue in 2025. At N161.7 billion, marketing and distribution expenses rose by over 51 percent in the year – meaning an increase in the average cost of marketing and distributing a unit of the company’s sales.
Despite the incursion from marketing and distribution expenses, the company was able to keep operating profit up by 34 percent to over N225 billion.
By far the biggest positive impact on the company’s operating results in 2025 is a benign combination of finance income and cost. While finance income multiplied nearly 13 times to over N42 billion, finance cost fell by 74 percent to less than N101 billion.
The favourable development slashed net finance cost from the height of over N389 billion in 2024 to N58.5 billion in 2025. This directly propelled a turnaround from a pre-tax loss of N221.6 billion to a pre-tax profit of N166.8 billion in 2025.
The company’s bottom line of N105 billion for the year works out to earnings per share of N132.42, which is a big turnaround from loss per share of N207.65 in 2024.
Dividends to shareholders are not expected until the outstanding retained losses are wiped off and sufficient profits are generated to accumulate earnings once again.
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