Lahore: Nestlé Pakistan Limited reported a 3.69% decrease in revenue for the fiscal year ending December 31, 2024. The company’s annual report attributed this decline in revenue primarily to the implementation of an 18% sales tax on the majority of its portfolio, as introduced through the 2024-25 Finance Bill. This sales tax hike was passed on to consumers through increased product prices. Despite this setback, the company managed to improve its gross profit margin, thanks to a favorable product mix and value chain efficiencies.
The financial performance summary revealed that Nestlé Pakistan’s net sales stood at 193.21 billion PKR for 2024, down from 200.61 billion PKR in 2023. The gross profit margin improved to 36.0% from 35.3%, while the operating profit margin decreased to 15.3% from 17.2%. Net profit after tax also saw a decline, recording a 10.2% drop to 14.81 billion PKR, from the previous year’s 16.49 billion PKR. Earnings per share followed a similar trend, decreasing from 364 PKR to 327 PKR, marking a 10.2% reduction.
In light of the financial performance, Nestlé Pakistan’s Board of Directors recommended a final cash dividend of 30 PKR per share. This is in addition to an interim cash dividend of 136 PKR per share already paid, bringing the total dividend for 2024 to 166 PKR per share, compared to the 193 PKR per share distributed in 2023.
According to information available from the Pakistan Stock Exchange (PSX), Nestlé Pakistan made a substantial investment of 4.40 billion PKR in 2024, focusing on projects aimed at sustainability. The investments included allocations for the Sheikhupura Factory (2.03 billion PKR), Kabirwala Factory (937 million PKR), Water Plants (511 million PKR), Distribution and Sales (487 million PKR), and other areas (441 million PKR).
The company’s adherence to corporate governance was affirmed in the annual report, with compliance to the Code of Corporate Governance as mandated by the Securities and Exchange Commission of Pakistan (SECP) and stock exchange listing regulations. The Directors confirmed the soundness of the company’s financial statements, its internal control systems, and the absence of any significant doubts regarding its ability to continue as a going concern.
Attendance at board meetings was also highlighted, with several directors attending all four meetings held during the year. Notable names included Mr. Joselito Jr Avanceña, Mr. Syed Yawar Ali, and Mr. Syed Babar Ali. New appointments to the board included Mr. Angelo Giardini and Ms. Romana Abdullah, both of whom attended three meetings since their appointments.
Nestlé Pakistan remains committed to maintaining high standards of corporate governance and continues to focus on innovation and sustainability despite the challenges posed by the fiscal landscape and regulatory changes.