By Taofik Salako, Deputy Group Business Editor
Nestlé S.A., world’s largest food company, has acquired more equity stake valued at about N747.54 million in Nestle Nigeria as multinationals continued to tighten shareholding control on their Nigerian subsidiaries.
An insider transaction report on the deal indicated that Nestle acquired 636,384 ordinary shares of 50 kobo each at N1,174.67 per share. The deal increased the Swiss multinational food and drink company’s majority shareholding in Nestle by 0.08 per cent.
Nigeria is a key market for Nestle where the stock and the brands have sustained decades of market leadership. Nigeria and the rest of other Sub-Saharan Africa (SSA) recorded double-digit growth in the first half, driven by real internal growth.
Nestle’s half-year results for 2020 showed that SSA was the best-performing segment under the groups’ Asia, Oceania and sub-Saharan Africa (AOA) zone.
“We expect full-year organic sales growth between two per cent and three per cent. The underlying trading operating profit margin is expected to improve. Underlying earnings per share in constant currency and capital efficiency are expected to increase. This guidance is based on our current knowledge of COVID-19 developments and assumes no material deterioration versus present conditions,” Nestle SA stated in the group’s six-month report.
Key extracts of the interim report and accounts of Nestle Nigeria for the half year ended June 30, 2020 showed that turnover was steady at N141 billion in first half 2020 as against N141.9 billion in comparable period of 2019. Profit after tax stood at N21.8 billion in first half 2020.
Managing Director, Nestlé Nigeria Plc, Mauricio Alarcon, said the results illustrated the resilience of the company.
According to him, amid the on-going COVID-19 pandemic, Nestlé Nigeria has delivered consistent results in terms of revenue while exchange rate variations and increase in the price of some key materials have affected profitability.
“While it is still early to assess the impact of this crisis, we are fully confident in our people’s agility and deep commitment to overcome challenges and continue to deliver value for our shareholders and for society. Going forward, we will remain focused on three key priorities which include safeguarding the health and wellbeing of our people, ensuring business continuity to meet consumer needs and supporting our communities,’’ Mauricio said.