Nestle declares N28.1bn dividend as pandemic impacts operations
Nestle Nigeria Plc, leading consumer goods company, has reported positive performance metrics for the year ended December 31, 2020, albeit the performance reflected the harsh economy environment caused by Coronavirus pandemic in the year.
The company has just declared payment of N28.1 billion to its shareholders as the final dividend for the period ended 31st December 2020.
According to the announcement made available to its shareholders and the investing public via the website of the Nigerian Stock Exchange, Nestle is expected to pay a final dividend of N35.50 per share for all the outstanding 792,656,252 ordinary shares of the company which brings the total dividend payout to qualifying shareholders to N28.14 billion.
Given that the company has paid an Interim dividend of N25 per share to shareholders towards the end of 2020, the addition of the final dividend of N35.5, puts Nestle’s total dividend for 2020 at N60.5 per share.
This is however 13.57 per cent lower than the total dividend payout for 2019 at N70 per share.
According the announcement, the final dividend will be paid electronically to shareholders on the 23rd of June, 2021, subject to appropriate withholding tax and approval at the Company’s Annual General Meeting.
Business Metrics’ analysis of the company’s 2020 full year report shows a 1.06 per cent marginal rise in its revenue from N284.035 billion in 2019 to N287.084 billion in 2020.
On the other hand, its cost of sales rose by 7.69 per cent to N167.872 billion in 2020 from N155.889 billion in the preceding year.
Also, while profit before tax fell by 14.74 per cent to N60.638 billion, profit after tax stood at N39.212 billion, 14.17 per cent lower than 45.683 billion posted in 2019.
The declines recorded in the key metrics have been ascribed to the novel pandemic and other economic headwinds as well as government policies.
According to David Ifezulike, chairman, board of directors, all manufacturers in the food and beverage sector were classified as essential services and excluded from COVID-19 lockdown in 2020.
“Notwithstanding the exemption, our Company encountered challenges with the availability of key raw and packaging materials including sugar.
“The prices of some materials increased exponentially while access to foreign exchange for the importation of key items became more restricted,” he said.
He added that heightened insecurity compelled some of Nestle’s distributors to shut down.
“The closure or partial closure of key markets and the lack of patronage at the make-shift markets opened by some state governments also put pressure on the business during the period.
However, he noted that “the good news is that thanks to the resilience of our team, we managed to keep our factories open and operational despite the challenges.
“We also kept our people safe and motivated by working together to put in place and adhere to the recommended COVID-19 preventive measures.”