The shareholders of Nestle Nigeria Plc have approved a dividend of N28.14bn or N35.47 per ordinary share proposed by its board of directors for the financial year 2020.
The company announced during its annual general meeting on Tuesday that its profit after tax for 2020 dropped by 14.16 per cent to N39.21bn.
It reported revenue of N287.08bn, an increase of 1.07 per cent from N284.04bn in 2019.
Its financial statements showed a profit before tax of N60.64bn for 2020, down 14.74 per cent from N71.12bn in 2019.
Nestle’s net finance costs jumped by 302.90 per cent from N938.22m in 2020 to N3.79bn in 2019, which the company attributed to the result of double digit interest loans and the exchange rate difference.
Its earnings per share dropped by 14.20 per cent from N57.63 to N49.47.
In his address, the Chairman of Nestle’s Board of Directors, David Ifezulike, said the year 2020 was a challenging one for the business due to the impacts of the COVID-19 pandemic on the economy.
He said the company’s input costs increased drastically as the country was hit hard by inflation and there was a significant reduction in disposable income of consumers as a result of higher electricity tariff and the cost of Premium Motor Spirit.
He said, “Despite the challenges in 2020, our company demonstrated its resilience in the tough business environment. Nestlé Nigeria Plc recorded a 14 per cent decrease in profit after tax over 2019.”
“I am therefore pleased to announce that the Board recommends for the consideration and approval of shareholders at this meeting, a total final dividend of N28,139,296,946 or N35.47 per ordinary share.”
The shareholders lamented some issues during the meeting including the company’s increased cost of borrowing as it borrowed $100m twice from its parent company at 11.34 per cent interest for a seven-year period, and the drop in dividend payment year-on-year.
They, however, commended the company for its positive value addition and its profitability amidst the pandemic’s effect.
Reacting to questions on Nestle’s plans to curtail the effects of exchange rates and inflation, Ifezulike said, “These things affect our cost of production but you can’t run away from that. We will try to manage the effects and continue to deliver value to our shareholders.”