Shareholders of Nestle Nigeria Plc have commended the board of directors for recommending a dividend of N7.93 billion for the year ended December 31, 2016, despite the decline in bottom-line of the company.
Speaking at the annual general meeting (AGM) in Lagos, the shareholders said it was gratifying to note that Nestle is paying a dividend of N7.93 billion, which translates to N10.00 per share for the 2016 amidst a decline of 67 per cent in profit after tax (PAT) for the year.
While Nestle Nigeria grew its revenue by 20 per cent from N151.3 billion to N181.9 billion, PAT fell from N23.7 billion to N7.92 billion due to impact of naira devaluation and expiration of the pioneer status among others.
The lower bottom line notwithstanding, the directors recommended a dividend of N10.00 per share, which is lower than the N29.00 paid the previous year.
For instance, Sir Sunny Nwosu of Independent Shareholders Association of Nigeria (ISAN), lauded the company for the dividend declared in the face of the challenging environment.
He advised that the company’s products quality must be sustained in order to maintain its leadership position in the industry, adding that Nestle should also extend its water business production line to South-east to tap into enormous opportunities in the area.
Another shareholder, Mr. Williams Adebayo, said that the company should map out strategies aimed at reducing loans and borrowings and that the company should consider rights issue for fresh funds as an option.
In his address to the shareholders, Chairman of Nestle Nigeria, Mr. David Ifezulike, said 2016 was a challenging year due to scarcity of foreign exchange , devaluation of the naira and unfriendly economic policies, among others.
According to him, the scarcity of foreign exchange and devaluation of the nation’s currency led to increase in the company’s foreign loans portfolio.
“The fact that our sales increased by 20 per cent in 2016 is a confirmation that our brands continue to enjoy strong patronage from consumers in spite of inflationary pressures, weak purchasing power and the challenging operating environment. This is possible due to their nutritional benefits and contributions to the health and wellness of our consumers,” he said.
