• To hold EGM on June 30 to pass resolution pertaining to de-listing of its shares from CSE’s official list 

Nestlé Lanka PLC saw its March quarter (1Q23) profits surging as a result of strong top line performance, backed by prices hikes.

The company which produces and markets Maggi instant noodles, Nestomalt, Milo and a number of other products, saw its revenue for quarter under review surging 37.4 percent year-on-year (YoY) to Rs.20.6 billion, while cost of sales rose at a slower pace of 30.6 percent YoY to US$ 12.6 billion.

This resulted in a gross profit of Rs.8 billion, up 49.6 percent YoY.

Even though the company saw increased marketing, selling and distribution expenses and administrative expenses during the quarter, it was able to record Rs.4.6 billion operating profit, up 227.3 percent YoY.

For the quarter under review, the company reported a net finance income of Rs.548.1 million against and finance expense of Rs.511.4 million a year ago, as a result of the appreciation of the rupee, which began during the early part of the year, against the dollar.

The profits of the company in FY22 were significantly impacted by the exchange losses relating to unrealised losses on an intra group foreign currency loan.

Meanwhile, the firm’s income tax expenses rose to Rs.1.57 billion during the quarter under review from Rs.95.9 million a year ago amid higher tax rates that came into effect from this year. 

Accordingly, the company reported earnings of Rs.68.22 a share or Rs.3.6 billion for 1Q23 compared to earnings of Rs.15.36 per share or Rs.825.1 million in 1Q22.

About a week ago, Nestlé Lanka announced its plans to go private by delisting its shares from the Colombo Stock Exchange (CSE) subject to shareholder and regulatory approval. A stock exchange filing by the company said it has made arrangements with the Nestlé Lanka parent, Nestlé S.A., to purchase the shares from the shareholders, who may wish to divest their shareholding in the company at a price of Rs.1,500 per share.
The Nestlé Lanka share last traded at Rs.1,120.25.

The company is holding an Extraordinary General Meeting (EGM) on June 30, 2023 to pass the resolution pertaining to the de-listing of its shares from the official list of the CSE.
Nestlé S.A. owns 91.95 percent of the issued shares of Nestlé Lanka and the company’s public holding is 8.05 percent, scattered among 6,054 shareholders.