Monday, July 26, 2021

    Nestle Nigeria to Pay Higher Dividend Despite Reduced Profit

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    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    Nestle Nigeria Plc has decided to dip its hands into its retained profit to pay shareholders higher dividend for the year ended December 31, 2020.

    The move is in order to maintain its robust dividend policy.

    Nestle Nigeria Plc is well known for rewarding shareholders with good dividend. Although the company’s profit fell 14 per cent from N45.683 billion to N39.212 billion, it has recommended a higher dividend payment ratio.

    The directors recommend the payment of a final dividend of N35.50 per share having earlier declared an interim dividend of N25, to bring the total dividend to N60.50. The dividend payout amounted to N47.95 billion, which is higher than the N39.212 billion profit recorded in 2020.

    The proposed final dividend of N35.50 comprise N24.50 from the after tax profit for the year ended 31 December 2020, and N5.00 and N6 from the after tax retained earnings of the years ended 31 December 2019 and 2018, respectively.

    Although Nestle reported increase in top-line, its bottom-line took a beating due to high financing cost, the high inflationary pressure, increased excise duty, value-added tax, and the coronavirus pandemic.

    Net financing cost soared by 302 per cent from N938 million to N3.78 billion. The increase in finance cost was primarily due to a multi-fold increase in foreign exchange losses to N1.7 billion from N37.3 million in 19.

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