Nestle Nigeria Reports Impressive 2017 Results

The management of Nestle Nigeria plc has released 2017 Full Year result shown an impressive performs. However, the sales in Q4 were lower-than-expected so it gave a negative surprise.

The reported disclosed revenue of N244.2bn up by 34% higher than 2016Full Year recorded, but slightly below consensus NGN245.9bn

In the same vein, the company recorded EBITDA of N62.18bn up by 41% higher compared with 2016 Full Year, and well-above consensus N58.5bn.

Still on impressive record, the finance charges for year dropped by 27.6% to close on N15.1bn

The Profit After Tax stood at N33.7bn, up by 326% higher to 2016Full Year, and above consensus NGN29.9bn

Compared to analyst estimates, revenue and EBITDA trailed by 4% and 7% respectively while PAT beat by 9%

The most interested topic to shareholders is the dividend which showed final dividend of N27.5 was declared, equating to N42.5 for the year as against analyst estimate of N38.2 and 3% yield on last closing price

For Q4-17, though revenue was higher by 12.4% y/y, it declined 7% q/q, suggesting possible lower sales volume. Compared to analyst estimate, sales revenue was down 14%

Gross margin in Q4-17 was 42.4%, -219 bps y/y and -107 bps q/q, and in line with analyst estimate

Opex grew 17% y/y and 11% q/q. The reported 21% ratio to sales is consistent with analyst estimate, and is greater than the 20% reported in Q4-16 and 9M-17 average of 17.7%

EBIT margin of 21% was lower 309 bps y/y and 447 bps q/q

The surprising declines in finance income (-102% y/y and 104% q/q) and finance charges (120% y/y and 97% q/q) are noteworthy. Net forex loss in Q4 was NGN20 million – the lowest recorded during the year

While PBT fell 23% y/y (+23% q/q), PAT grew 44% y/y (67% q/q) on significantly lower effective tax rate of 13% as against 54% in Q4-16 and 36% in Q3-17.

Post Comment