No doubt the policy decisions implemented by President Bola Ahmed Tinubu’s administration, specifically the subsidy removal and naira floating, have had a profound impact on Nigerian companies, leading to significant losses, increased costs, reduced consumers spending, decreased profitability and a subsequent inability to declare dividends, ultimately affecting their overall performances.
The past two years have been marked by a dividend drought, yet some companies in the fast moving consumer goods segment have demonstrated resilience, achieving improved turnover through strategic focus.
Despite incurring losses in 2023 and 2024, these companies have shown promising signs of recovery, underscoring their adaptability and determination to thrive in a challenging business environment.
However, a new dawn has emerged for investors in 2025, as companies previously grappling with losses are now reporting profits, thereby bolstering shareholders earnings per share.
This turnaround has infused fresh optimism into the market, offering a glimmer of hope for existing investors and enticing prospective ones with promising prospects.
Nestle Nigeria Plc is a notable example of this turnaround, having navigated the challenging economic landscape without declaring dividends in 2023 and 2024. Despite these difficulties, the company’s board and management team have demonstrated remarkable resilience, steering the organization through turbulent times and positioning it for future success.
For astute investors, 2025 is delivering more than just dividend payouts, it’s yielding substantial returns. Beyond the occasional bonuses, capital appreciation has become the primary driver of Return on Investment (ROI), outperforming traditional dividend yields.
This shift in focus reflects a savvy investor mindset, prioritizing long-term growth over short-term gains, and reaping the rewards of their investments in Nestle Nigeria Plc and other resilient companies.
Nigeria’s stock market has delivered an impressive performance in 2025, with a year-to-date return of 43.51% as of October 14, 2025. What’s even more remarkable is that this growth has outpaced the inflation rate of 20.12%, resulting in a real yield of over 23%. This strong performance underscores the resilience and potential of Nigeria’s capital market, making it an attractive destination for investors seeking growth opportunities.
Nestlé Nigeria’s 114% rise as of September 2025 is a remarkable turnaround, especially compared to its 20% decline in 2024. This impressive rally has investors wondering if the momentum can be sustained, given the current market dynamics which favor capital appreciation over traditional dividend yields, making Nestlé a prime example of a stock delivering value through growth.
Commenting on this, Tajudeen Olayinka, an investment banker and senior stockbroker with Valmon Securities Limited, said “globally, investors prioritize earnings and prospects over dividend payouts, as dividends don’t always reflect a company’s true value”.
He noted that human factors and biases can influence dividend decisions, leading to overvaluation or undervaluation. “This is why capital appreciation is becoming a key focus for savvy investors, as it reflects a company’s underlying strength and growth potential.”
The investment banker explained that “dividend is not everything, for me, earnings’ multiples does it better, and that is why investors are more forward looking to earnings capabilities, for Nestle, and some others companies who are not able to pay dividend today because of temporary effect of foreign exchange losses on their current earnings, believing that appropriate dividends can still come from future earnings”.
With the positive turnaround in Nestle Nigeria Plc 2025 first and second quarter unaudited financial performance, David Imafidon Adonri, Executive Vice Chairman of Highcap Securities Limited, expresses optimism about Nestle Nigeria Plc’s future, citing their impressive recovery from losses and robust income-generating capabilities. “Their turnaround is a testament to their resilience and adaptability,” Adonri notes.
“As they regain momentum, investors are regaining confidence, driving up demand and prices. We expect Nestle Nigeria Plc to revive its dividend payout tradition, rewarding shareholders with attractive returns.”
Adonri highlights Nestle Nigeria Plc’s significance in the market, noting, “as one of the top 10 most capitalized companies on the Nigeria Exchange Limited, Nestle is a prime target for foreign investors seeking exposure to Nigerian equities. After facing significant losses due to the naira’s floatation, the company has made a remarkable comeback, restoring profitability and reaffirming its position as a market leader.”
He pointed out that Nestle is a household name in the industry where it is also the undisputed leader. “with the intrinsic values that these enterprises possess, it is therefore not surprising that despite not paying dividends in recent times, the demand for their stocks remains upbeat. It is also instructive to note that before the exchange rate calamity was visited on them, they were consistent in dividend payments and even belonged to the category of companies with the highest dividend payout”.
Following Nestle’s first and second quarter 2025 impressive performance the company crossed the N1 trillion market capitalization milestone, reaching a 52-week high in May 2025. The company’s remarkable turnaround is highlighted by its shift from a pre-tax loss of N252.5 billion in half year of 2024 to a substantial profit of N88.4 billion in half year of 2025, showcasing its resilience and operational strength.
The turnaround was attributed to robust revenue growth and prudent cost management, yielding a profit after tax of N50.6 billion in half year of 2025. This marks a significant reversal from the N176.6 billion loss recorded in the second quarter of 2024, underscoring the company’s ability to navigate challenges and capitalize on opportunities.
Titus Oyafemi, Managing Director of Networth Securities Limited, attributes Nestle Nigeria’s improved performance to a more stable macroeconomic environment, particularly a steadier Nigerian naira.
According to him, this stability has mitigated the foreign exchange losses that had weighed heavily on the company’s 2024 results, allowing it to regain its footing and deliver a stronger financial performance in 2025.
“with improved liquidity, Nestle Nigeria Plc is poised to reduce external funding reliance and accelerate debt repayment. Notably, the company prepaid $20 million in intercompany foreign exchange liabilities in the second quarter of 2025. As capital gains drive market momentum, Nestle and its peers have overcome losses, setting the stage for potential dividend declarations by 2026,” says Titus Oyafemi, Managing Director of Networth Securities.
Despite its balance sheet challenges, Dimeji Adeleke, Financial Secretary of Dedicated Shareholders Association Of Nigeria (DSAN), highlights Nestle Nigeria Plc’s appeal, saying its earnings are backed by cash flow, making it a solid long-term play.
“Investors are buying into the company’s future, not just its current performance. With foreign partners holding significant stakes, Nestle’s prospects look bright, driven by its cash flow and recent quarterly results.”
The shareholders advocates further expantiated that “for instance, look at honeywell they have declared dividend last in the past 6 to 7 years . The price increased from N3 to N22 this year, the revenue is growing and the shareholders fund is increasing so people are buying because of the future of the company. Also look at international breweries too, the price has increased though they are not paying dividends. Investors believe that since they are still producing and their product is still in the market they are a good buy”.
Also a retail investor and accountant Lanre Adelakun, while expressing his excitement with the current share price, said “I started tracking Nestle after their 2024 AGM, where the board, led by Gbenga Oyebode, outlined plans to revalue assets. This strategic move, coupled with improving financials, has boosted investor confidence, driving the share price upwards.”
Adelakun notes, “While Nestle’s valuation may seem high, its scale, profitability, and cash generation justify the premium. Compared to its peers, Nestle offers superior value, backed by robust earnings and cash flow that support its market price. Its quality and resilience make it a compelling investment, even at a higher multiple.”
Meanwhile , Nestle Nigeria Plc unaudited third quarter results for the period ended September 30, 2025, shows impressive growth, with earnings per share of N27.64, a turnaround from the N9.56 loss per share in third quarter of 2024.
The company’s nine months earnings per share stands at N91.44, a significant recovery from the N232.47 loss per share in 2024, highlighting its strong rebound.
Revenue advanced modestly by 17.5%, driven by steady growth across the food and beverages segments. Gross margin expanded by 301bps year on year to 33.6% in the third quarter of 2025, supported by modest topline growth and stronger cost optimization across raw material sourcing and production efficiency.
However, EBITDA margin contracted by 89bps to 20.1%, primarily due to a sharp rise in consumer promotional expenses, as the company intensified marketing efforts to sustain brand competitiveness and stimulate volume recovery in a still fragile demand environment.
Nonetheless, the nine months 2025, EBITDA margin improved to 23.6%, underscoring sustained margin recovery driven by pricing gains and easing cost pressures.
The company benefited from foreign exchange stability, posting significant foreign exchange gains of N17.62 billion in third quarter of 2025, compared to foreign exchange loss of N21.58 billion in third quarter of 2024.
This markedly reduced finance costs by 76.5% year on year, bolstering profitability and driving a strong rebound in profit before tax to N39.56 billion from a loss of N3.08 billion in the corresponding period of 2024 full year.
Ultimately, the company delivered a profit after tax of N21.91 billion in the third quarter of 2025, a sharp rebound from the pre-tax loss of N7.58 billion recorded in the same period of 2024.
This performance lifted pre-tax profit for nine months to N72.48 billion, compared to a pre-tax loss of N184.27 billion in nine months of 2024, despite a higher effective tax rate of 43.4% against 27.8% in 2024..
Wassim Elhusseini, Managing Director/CEO of Nestlé Nigeria Plc, notes that “the results for the nine months signify the sustainability of our return to profitability since the fourth quarter of 2024. The topline growth of 33% during this period, along with a profit after tax of N72.5 billion, clearly illustrate that our dedication to operational excellence and our robust fundamentals are producing the desired outcomes.”
Eihusseini, emphasized that? “we remain focused on enhancing our margin management initiatives, accelerating transformation of our business, while investing in programs that create sustainable value for all our stakeholders, starting from our employees, consumers and extending to our communities and partners across our value chain.”
As investors anticipates Nestle Nigeria 2025, full year financial result, its nine months performance highlights the company’s resilience and operational strength. With strategic cost optimization, including local sourcing and LNG adoption, market watchers expect sustained momentum, driving higher operating profit and positioning the company for long-term success.
Nestlé Nigeria Plc, which closed at N1,915 on October 31, 2025, is a leading food and beverage company in Africa. With a purpose to “unlock the power of food to enhance quality of life for everyone, today and for generations to come,” the company remains committed to its mission.
With over 62 years in Nigeria, Nestlé has been delighting consumers with high-quality, nutritious food and beverages under iconic brands like MAGGI, MILO, GOLDEN MORN, NESTLÉ PURELIFE, CERELAC, NESCAFÉ, and NIDO.
Headquartered in Lagos, with 3 manufacturing sites and 7 branch offices, Nestlé Nigeria is a force for good, enhancing wellbeing, livelihoods, and communities, while driving environmental sustainability.
