Shareholders of Nestle Nigeria Plc have stressed the need for the management of the company to intensify efforts towards ensuring that raw materials for production are sourced locally while increasing its export business to tackle foreign exchange (forex) issues.
At the company’s 55th yearly general meeting held in Lagos yesterday, the shareholders said the company’s 45 per cent domestic sourcing, against 55 per cent foreign would expose the company more to vagaries of foreign exchange issues, noting that accelerating its backward integration programme would help boost profitability in the current financial year.
Irked by the nation’s macroeconomic challenges that impacted negatively on the company, resulting in nonpayment of dividends in 2023, the shareholders stated that if urgent steps are not taken to tackle the prolonged forex issue, inflation, and insecurity among others, the current harsh operating environment would continue to depress listed firms profit margin and compel them to exit from the Nigeria market.
Founder of Independent Shareholders Association of Nigeria, Sunny Nwosu said the company should avoid any business that would expose the company to foreign exchange issues.
He applauded the company’s decision to remain operational in Nigeria, adding that fast-moving consumer goods to review their backward integration exercise to reduce finance costs on their operations and enhance profit for dividend payout.
`
President of the Pragmatic Shareholders Association, Bisi Bakare also urged the company to declare bonus issues to shareholders and ensure that the company’s unclaimed dividend figure is reduced to the barest minimum.
Reviewing its performance, the chairman, Gbenga Oyebode said the company’s revenue rose by N100 billion to N547 billion representing a 22.4 per cent increase over the 2022 figure while gross profit appreciated by 39.4 per cent to N217.1 billion.
“Our profit after tax of –N74.4n was negatively impacted by the revaluation of our foreign currency obligations due to the devaluation of the Naira. The resultant negative equity position is being reviewed by the board as we proactively monitor the developments in monetary policy.”
He said the company in 2023 set a sustainability agenda that guaranteed its contributions towards achieving global net zero ambitions.
“We have progressed in the commitment to reduce our environmental footprint and achieve a waste-free future by focusing on plastic neutrality, energy conservation, sustainable waste management, and responsible waste management, in addition to responsible local sourcing of raw and packaging materials” “
Going forward, Oyebade said the firm would focus more on innovation to enable it to deliver affordable products to stakeholders.
He added that the company would sustain investment in its operations as well as implement initiatives that would address social and environmental problems to support local communities and create value for shareholders.
