Nestlé delivers Rs. 37.3 b sales in 2018 amidst challenging market conditions

Nestlé Lanka Plc said yesterday it delivered a revenue of Rs. 37.3 billion and a net profit of Rs. 3.5 billion for the full year ending 31 December 2018, amidst challenging market conditions. Revenue for the fourth quarter was Rs. 9.4 billion with a net profit of Rs. 0.9 billion.

In a statement the company said 2018 was a challenging year, impacted by unfavourable exchange rates, political uncertainty, and floods, leading to low consumer confidence and weak consumer demand. In addition, the withdrawal of concessionary income tax rates on the company’s Exports and Ready-to-Drink businesses, along with an increase in financing cost to support the company’s investment of approximately Rs. 5 billion to enhance production capacity (completed in late 2018), impacted the company’s net profit for the year.  

The company’s contribution to the exchequer as taxes in 2018 was Rs. 6.4 billion.

The Board approved an interim dividend of Rs. 25 per share on 21 February 2019 and proposed a final dividend of Rs.25 per share for the full year, to be approved at the company’s Annual General Meeting on 8 May. 

Nestlé Lanka Managing Director Fabrice Cavallin said: “Despite challenging market conditions, we continued to invest. We made significant progress in ramping up our portfolio with necessary product innovations and renovations, and continued to be a positive force in the local community through our products, services and social responsibility initiatives. 2019 is expected to be another challenging year due to a remaining sluggish business environment amidst a hike in commodity prices, combined with the significant depreciation of the currency.”

The company continued to support the local community in 2018 by paying out Rs. 2.9 billion to thousands of local dairy farmers for fresh milk and Rs. 4.6 billion to the local coconut industry for purchase of fresh coconut. 

Using its strong local consumer insight, Nestlé strengthened its product portfolio in 2018 and continued to build on its market leader position in child nutrition. 

The company continued to be recognised over 2018 for its consistent performance and contribution to the country. 

It was awarded Best Corporate Citizen in the Manufacturing Sector for the second consecutive year at the prestigious Best Corporate Citizen Sustainability Awards 2018, organised by the Ceylon Chamber of Commerce. The company was recognised as one of the top three Best Corporate Citizens in the country, with an overall second runners-up win. 

It was also ranked Sri Lanka’s Most Respected F&B Company in LMD’s Most Respected Entities ranking for the third consecutive year, and Sri Lanka’s Most Valuable Food and Beverage Brand in 2018 by Brand Finance, in its annual report of Sri Lanka’s most valuable and strongest brands. 

The company also won the ‘Highest Foreign Exchange Earner’ award in the Coconut Kernel product category at the Presidential Export Awards. This marks the seventh Presidential Export Award for the company in recognition of its strong contribution to national exports, and efforts to create sustainable livelihoods for local coconut growers and farm workers. 

Nestlé was also the highest ranking F&B company in Business Today’s list of Sri Lanka’s top 30 leading corporates for 2017-2018. It was recognised for its enduring commitment to the country; enabling growth, providing economic and social opportunities, and enhancing the quality of life of the Sri Lankan people. 

The company’s brands also continued to be recognised over the year. Its Maggi noodle range was recognised for its high quality standards by SLSI (Sri Lanka Standards Institute), and it clinched no less than six wins for its Maggi, Nestomalt, Milo and Nangrow brands at the Effie Awards. Sri Lankan students voted Milo ‘Student Beverage Brand of the Year’ for the fourth consecutive year, and its Milo and Nestomalt brands were ranked the No. 1 and No. 2 Most Loved Beverage Brands in 2018 by Brand Finance.