Nestle declares Rs111 dividend per share despite profit drop

MG News | July 25, 2024 at 03:12 PM GMT+05:00

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July 25, 2024 (MLN): Nestle Pakistan Limited (PSX: NESTLE) recorded a 6% year-on-year decrease in its earnings for the quarter ended June 30, 2024, with a profit after tax of Rs 5 billion (EPS: Rs 110.3), compared to a profit of Rs 5.32 billion (EPS: Rs 117.4) in the same quarter last year.

Regardless of the drop in the bottom line, the company has declared an interim cash dividend of Rs111 per share.

Going by the results, the company's top line increased by 2.8% YoY to Rs53.29bn as compared to Rs51.84bn in SPLY.

The cost of sales dropped by a greater proportion, due to which the gross profit of the company improved by 12.4% YoY to Rs20.02bn in Q2 2024.

On the expense side, the company's administrative expenses fell by 10.4% year-on-year to Rs 1.44bn.

However, selling and distribution expenses and other operating expenses spiked by 58.9% year-on-year and 34.73% to Rs 9.03bn and Rs 642.9m, respectively.

During the period under review, other income came to the company's support, marking an increase of 437.% YoY to stand at Rs34.53m in Q2 2024 as compared to Rs6.43m in SPLY.

The company’s finance cost grew by 7.4% YoY and stood at Rs808.35m as compared to Rs752.82m in SPLY, mainly due to higher interest rates.

On the tax front, the company paid a lower tax worth Rs3.13bn against the Rs3.97bn paid in the corresponding period of last year, depicting a fall of 21.2% YoY.

To sum up, NESTLE's performance this quarter was affected by rising expenses and higher finance costs, leading to a decline in profit.

Financial Results for the quarter ended June 30, 2024 (Rupees in '000)
	Jun 24	Jun 23	% Change
Sales	53,289,217	51,838,551	2.80%
Cost of sales	(33,269,004)	(34,030,910)	-2.24%
Gross Profit/ (loss)	20,020,213	17,807,641	12.42%
Administrative Expenses	(1,444,761)	(1,611,978)	-10.37%
Selling And Distribution Expenses	(9,030,423)	(5,681,974)	58.93%
Other Income	34,526	6,429	437.04%
Other Operating Expenses	(642,898)	(477,191)	34.73%
Finance Cost	(808,352)	(752,823)	7.38%
Profit/ (loss) before taxation	8,128,305	9,290,104	-12.51%
Taxation	(3,126,032)	(3,966,066)	-21.18%
Net profit/ (loss) for the period	5,002,273	5,324,038	-6.04%
Basic earnings/ (loss) per share	110.30	117.40	-

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