NESTLÉ NIGERIA'S 2015 SAFE NEST

For companies like Nestle Nigeria PLC, it was rather doubtful if financial year 2015 was that tough.
According to the audited figures to December 2015 released recently, Nestle Nigeria rather built a safer nest for itself through good grip over all costs.
It ended the year with only 5.45% growth in overall income to N151715.3m from N143880.6m as finance income 19.5% drop watered down 5.54% increase in core revenue from N143329m to N151271.5m.
However, this resulted in 15.6% increase in operating profit and final 19.9% rise in profit before tax in a year the more popular mantra was profit drop or loss.
But how come? Simple. First direct cost of producing the goods sold rose by only 2.23% to N83926m from N82099.1m.
Then among overheads, marketing and distribution cost increased by 4.93%, again behind revenue growth. It ended the year at N25905.6m compared to N24688.3m previously.
Thus, as administration expenses rose by 4.81% to N7693.7m from N7340.4m, the foundation for the resultant double digit growth in operating profit was in place
Finally, even though finance income  decreased by 19.5%, associated cost went down by 8.24% to NN4868.6m from N5305.8m
In the end, Nestle Nigeria profit before tax after charging other incidentals like depreciation came to N29322.5m as against N24446m in 2014.
Decoded: Nestle Nigeria thus gained N19.3 on each N100 income in 2015 compared to N17 in 2014.
Not bad for a tough year for all
However, the company's liquidity position as measured by working capital didn't quite reflect the astute handling of costs within the year. Working capital deficit closed 2015 at N11017.2m as against N7248.8 deficit in 2014.
SO:
* In the current year more attention may have to be paid to working capital movement especially as there was 27% rise in trade payables to N36561.7m and 34.4% increase in short term borrowing although overdraft dived to N305m from N1237.6m.
* Interestingly, amidst all that long term borrowing dropped by 31.8% to N125530.4m 

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