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Nestlé continues Nigeria’s shares mop up

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By Taofik Salako Deputy Group Business Editor

Nestlé S.A, world’s largest food company, has continued its recent spree of buying shares of its Nigerian subsidiary, Nestle Nigeria Plc, through the secondary market.

Barely few weeks after acquiring additional equity stake valued at about N747.54 million, Nestle S.A has again acquired new shares worth about N287 million, bring the total stake on Nestle Nigeria’s shares to more than N1 billion.

In what underscored the attractiveness of the Nigerian shares to the multinational, Nestle S.A struck the latest deals at a premium of N1,249.65 per share compared with previous transaction price of N1,174.67 per share. In the latest acquisition, a deal was struck for 229,697 ordinary shares of 50 kobo each.

Earlier, Nestle had acquired 636,384 ordinary shares of 50 kobo each at N1,174.67 per share. The transaction increased the Swiss multinational food and drink company’s majority shareholding in Nestle Nigeria 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.

Read Also: Nestlé S. A. acquires more stake in Nigeria’s subsidiary

“We expect full-year organic sales growth between 2.0 per cent and 3.0 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.w

Managing Director, Nestlé Nigeria Plc, Mauricio Alarcon, said the results illustrated the resilience of the company.

According to him, amidst 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.

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