Nestlé Nigeria reported that its liabilities loomed past assets by N78.1 billion (13.4 per cent) last year after a free slide in the value of the naira-stressed operations.
The development threw the company into record loss, according to its audited accounts published on Wednesday.
Total liabilities for 2023 accelerated to N659.8 billion from N384.8 billion a year ago in reaction to a monumental surge in foreign exchange loss.
Fellow multinational PZ Cussons Nigeria made a disclosure of a similar nature last week, where it declared a negative net asset position of N23.2 billion, a mark of record hard times for foreign companies in Nigeria, where inflation is near its 30-year peak and the dollar is barely available for businesses.
Following the woes that the storm has caused, Nigeria is seeing a continued flight of international companies including Procter & Gamble as well as GSK – maker of Ribena, Panadol and Sensodyne – away from its shores.
Loans denominated in US dollars constituted more than 60 per cent of Nestlé Nigeria’s total liabilities, during a year when the naira shed half of its value against the currency.
It means the consumer goods giant’s debts shot to N402.3 billion from N155.3 billion within a year when converted into local currency.
Net exchange loss after translating foreign currency into naira stood at N195.1 billion, twenty-two times more than the loss posted a year earlier.
That took the loss before tax to N104 billion, but a tax credit in the sum of N24.6 billion from fiscal authorities, helped soften the impact of that expense on the bottom line, cutting loss after tax to N79.5 billion.
Nestle Nigeria, the local subsidiary of the Swiss-based world’s biggest food company Nestle S.A., found its way into the country one year after independence in 1961 and has been a powerhouse in the consumer goods space with formidable brands such as Milo, Nescafe, Golden Morn, Maggi among others.
Brands manufactured and traded internationally are in excess of 2000 according to the company’s website.
