Condensed interim financial information for
the six months ended June 30, 2024
Good Food, Good Life
NESTLÉ PAKISTAN LIMITED
DIRECTORS' REVIEW
The Directors of Nestlé Pakistan Limited (the "Company") are pleased to submit the half-year report, along with the condensed interim financial statements of the Company for the six-month period ended June 30, 2024.
Business Performance Review:
Sales for the six-month period ended June 30, 2024, stand at PKR 107.7 billion, reflecting a growth of 6.2% compared to the same period of last year. The increase in revenue was driven by broad-based growth across our brands and further complemented by demand-generating activities and a favorable portfolio mix. Due to headwinds in commodity and energy prices, gross profit as a percentage of sales has declined while an increased investment behind brands has further impacted operating profit.
The financial performance for the six-months period is summarized below:
Jan - Jun 2024 | Jan - Jun 2023 | Change | |
PKR Million | PKR Million | ||
Sales | 107,684 | 101,430 | 6.17% |
Gross Profit | 39,759 | 38,179 | 4.14% |
% of sales | 36.92% | 37.64% | |
Operating Profit | 19,264 | 21,386 | -9.92% |
% of sales | 17.89% | 21.08% | |
Net Profit after tax | 10,070 | 10,985 | -8.34% |
% of sales | 9.35% | 10.83% | |
Earnings per share | 222.05 | 242.25 | -8.34% |
Future Outlook:
As part of the recent Finance Bill, several taxes have been announced that impact our operations. We are currently evaluating the impact on our business performance and future growth. Additionally, we anticipate that high commodity and input costs will persist for the remainder of the year. In light of these factors, the Company maintains a cautious outlook and will take necessary measures to manage this challenging environment.
For and on behalf of the
Board of Directors
Joselito Jr Avanceña | Syed Yawar Ali |
Chief Executive Officer | Director |
Lahore | |
Dated: July 25, 2024 |
EY Ford Rhodes | UAN: +9242 111 11 39 37 (EYFR) |
Chartered Accountants | Tel: +9242 3577 8402 |
96-B/1, 4th Floor, Pace Mall Building | Fax: +9242 3577 8412 |
M.M. Alam Road, Gulberg-II | ey.lhr@pk.ey.com |
P.O. Box 104, Lahore-54660 | ey.com/pk |
INDEPENDENT AUDITOR'S REVIEW REPORT
TO THE MEMBERS OF NESTLE PAKISTAN LIMITED
REPORT ON REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS Introduction
We have reviewed the accompanying condensed interim statement of financial position of Nestle Pakistan Limited as at 30 June 2024 and the related condensed interim statement of profit or loss and other comprehensive income, condensed interim statement of changes in equity, condensed interim statement of cash flows, and notes to the condensed interim financial statements for the six-month period then ended (here-in-after referred to as the "condensed interim financial statements"). Management is responsible for the preparation and presentation of these condensed interim financial statements in accordance with accounting and reporting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on these financial statements based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial statements is not prepared, in all material respects, in accordance with the accounting and reporting standards as applicable in Pakistan for interim financial reporting.
Other Matters
The figures of the condensed interim statement of profit or loss and condensed interim statement of comprehensive income for the three-month period ended 30 June 2024 and 30 June 2023 have not been reviewed, as we are required to review only the cumulative figures for the six-month period ended 30 June 2024.
The engagement partner on the audit resulting in this independent auditor's report is Arslan Khalid.
EY Ford Rhodes
Chartered Accountants
Lahore: 08 August 2024
UDIN: RR2024101914roeDn2c8
A member firm of Ernst & Young Global Limited
Nestlé Pakistan Limited
Condensed Interim Statement of Financial Position
As at June 30, 2024
Note
EQUITY AND LIABILITIES
Share capital and reserves
Authorized capital
75,000,000 (2023: 75,000,000) ordinary shares of PKR 10 each
Issued, subscribed and paid up capital
Share premium - capital reserve
General reserve - revenue reserve
Cash flow hedge reserve - revenue reserve
Accumulated profits - revenue reserve
Non-current liabilities
Long-term finances - secured
Lease liabilities
Deferred taxation
Retirement benefits
Current liabilities
Current portion of long-term liabilities
Short-term borrowings - secured
Running finance under mark-up arrangements - secured
Trade and other payables
Contract liabilities
Interest and mark-up accrued
Customer security deposits
Income tax payable
Unclaimed dividend
Unpaid dividend
Contingencies and commitments | 5 |
The annexed notes 1 to 13 form an integral part of these financial statements.
(Un-audited) | (Audited) | |
Jun 30, 2024 | Dec 31, 2023 | |
--- (Pak Rupees in '000) --- | ||
750,000 | 750,000 | |
453,496 | 453,496 | |
249,527 | 249,527 | |
280,000 | 280,000 | |
- | - | |
18,813,158 | 9,605,034 | |
19,796,181 | 10,588,057 | |
4,419,330 | 7,922,288 | |
1,495,951 | 1,602,346 | |
- | - | |
3,352,370 | 3,108,871 | |
9,267,651 | 12,633,505 | |
3,672,368 | 124,596 | |
9,900,000 | 5,500,000 | |
1,736,129 | 3,038,001 | |
56,100,990 | 56,858,675 | |
495,254 | 708,464 | |
716,798 | 469,982 | |
273,431 | 241,973 | |
1,286,496 | 121,746 | |
90,081 | 90,081 |
- 7,514,831
74,271,547 74,668,349
103,335,379 97,889,911
ASSETS | Note |
Non-current assets | |
Property, plant and equipment | 4 |
Capital work-in-progress | |
Deferred taxation | |
Long-term loans |
Current assets
Stores and spares
Stock-in-trade
Trade debts
Current portion of long-term loans
Sales tax refundable
Advances, deposits, prepayments and other receivables
Cash and bank balances
(Un-audited) | (Audited) | |
Jun 30, 2024 | Dec 31, | 2023 |
--- (Pak Rupees in '000) | --- |
28,942,420 28,697,131
2,304,035 3,091,540
3,110,970 2,000,463
245,860 270,633
34,603,285 34,059,767
4,342,859 4,011,709
35,085,499 33,438,484
6,744,920 2,232,611
132,388 149,709
15,030,394 17,168,509
5,510,151 5,729,408
1,885,883 1,099,714
68,732,094 63,830,144
103,335,379 97,889,911
KOMAL ALTAF | JOSELITO JR AVANCENA | SYED YAWAR ALI |
Chief Financial Officer | Chief Executive Officer | Chairman / Director |
Nestlé Pakistan Limited
Condensed Interim Statement of Profit or Loss
For the six month period ended June 30, 2024 (un-audited)
Six-month period ended | Three-month period ended | |||
June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |
--- (Pak Rupees in '000) --- | --- (Pak Rupees in '000) --- |
Revenue from contracts with customers - net Cost of goods sold
Gross profit
Distribution and selling expenses
Administration expenses
Operating profit
Finance cost
Other expenses
Other income
Profit before taxation
Taxation
Profit after taxation
Earnings per share basic and diluted (Rupees)
107,684,120
(67,925,226)
39,758,894
(17,535,258)
(2,959,412)
19,264,224
(1,570,724)
(1,395,928)
(2,966,652)
306,942
16,604,514
(6,534,748)
10,069,766
222.05
101,430,179
(63,251,621)
38,178,558
(13,672,007)
(3,120,909)
21,385,642
(1,366,106)
(2,527,290)
(3,893,396)
94,078
17,586,324
(6,600,397)
10,985,927
242.25
53,289,217
(33,269,004)
20,020,213
(9,030,423)
(1,444,761)
9,545,029
(808,352)
(642,898)
(1,451,250)
34,526
8,128,305
(3,126,032)
5,002,273
110.30
51,838,551
(34,030,910)
17,807,641
(5,681,974)
(1,611,978)
10,513,689
(752,823)
(477,191)
(1,230,014)
6,429
9,290,104
(3,966,066)
5,324,038
117.40
The annexed notes 1 to 13 form an integral part of these financial statements.
KOMAL ALTAF | JOSELITO JR AVANCENA | SYED YAWAR ALI |
Chief Financial Officer | Chief Executive Officer | Chairman / Director |
Nestlé Pakistan Limited
Condensed Interim Statement of Comprehensive Income
For the six month period ended June 30, 2024 (un-audited)
Six-month period ended
June 30, 2024 June 30, 2023
--- (Pak Rupees in '000) ---
Three-month period ended
June 30, 2024 | June 30, 2023 |
--- (Pak Rupees in '000) --- |
Profit after taxation
Other comprehensive income
Items that may be reclassified subsequently to profit or loss (net of tax)
Remeasurement loss on cash flow hedges - effective portion Related tax
Items that will not be reclassified subsequently to profit or loss (net of tax)
10,069,766
-
-
-
-
10,985,927
(4,628)
2,339
(2,289)
-
5,002,273 | 5,324,038 |
- | - | |
- | - | |
- | - | |
- | - |
Other comprehensive loss for the period | - | (2,289) | |
Total comprehensive income for the period | |||
10,069,766 | 10,983,638 | ||
The annexed notes 1 to 13 form an integral part of these financial statements.
KOMAL ALTAF | JOSELITO JR AVANCENA |
Chief Financial Officer | Chief Executive Officer |
- | - | |
5,002,273 | 5,324,038 | |
SYED YAWAR ALI
Chairman / Director
Nestlé Pakistan Limited
Condensed Interim Statement of Changes in Equity
For the six month period ended June 30, 2024 (un-audited)
Capital | Revenue reserves | |||||
Share | reserves | |||||
Capital | Share | General | Cashflow | Accumulated | ||
premium | reserve | hedge reserve | profits | Total | ||
-------------------------------------------------- | (Rupees in '000) ------------------------------------------------- |
Balance as at January 01, 2023 (audited)
Total comprehensive income for the six months ended June 30, 2023
Profit after taxation
Other comprehensive income
Final dividend for the year ended December 31, 2022 (Rs. 95 per share)
Balance as at June 30, 2023 (un-audited)
Total comprehensive income for the
six months ended December 31, 2023
Profit after taxation
Other comprehensive income
Transaction with owners directly recognized in equity
Interim dividend for the six-month period ended June 30, 2023 (Rs. 121 per share)
Interim dividend for the nine-month period ended September 30, 2023 (Rs. 53 per share)
Balance as at December 31, 2023 (audited)
Total comprehensive income for the six months ended June 30, 2024
Profit after taxation
Other comprehensive income
Transaction with owners directly recognized in equity
Final dividend for the year ended December 31, 2023 (Rs. 19 per share)
453,496
-
-
-
-
453,496
-
-
-
-
-
453,496
-
-
-
-
249,527
-
-
-
-
249,527
-
-
-
-
-
249,527
-
-
-
-
280,000
-
-
-
-
280,000
-
-
-
-
-
280,000
-
-
-
-
2,289
-
(2,289)
(2,289)
-
-
-
-
-
-
-
-
-
-
-
4,784,934 5,770,246
10,985,927 | 10,985,927 |
- (2,289)
10,985,927 10,983,638
(4,308,212) (4,308,212)
11,462,649 12,445,672
5,506,872 5,506,872
526,344 526,344
6,033,216 6,033,216
(5,487,302) (5,487,302)
(2,403,529) (2,403,529)
9,605,034 10,588,057
10,069,766 | 10,069,766 | |
- | - | |
10,069,766 | 10,069,766 |
(861,642) (861,642)
Balance as at June 30, 2024 (un-audited) | 453,496 | 249,527 | 280,000 | - | 18,813,158 | 19,796,181 | |||||
The annexed notes 1 to 13 form an integral part of these financial statements.
KOMAL ALTAF | JOSELITO JR AVANCENA | SYED YAWAR ALI |
Chief Financial Officer | Chief Executive Officer | Chairman / Director |
Nestlé Pakistan Limited
Condensed Interim Statement of Cash Flows
For the six month period ended June 30, 2024 (un-audited)
Cash flow from operating activities
Profit before taxation
Adjustments to reconcile profit before tax to net cash flows:
Depreciation of property, plant and equipment
Gain on disposal of property, plant and equipment - owned Provision for Workers' Profit Participation Fund Provision for Workers' Welfare Fund
Increase in provision for stores and spares (Decrease) / increase in provision for stock in trade Exchange (gain) / loss unrealized
Provision for defined benefits plans Finance cost
Profit before working capital changes
Effect on cash flow due to working capital changes:
(Increase) / decrease in current assets: Stores and spares
Stock-in-trade Trade debts
Sales tax refundable
Advances, deposits, prepayments and other receivables
Increase / (decrease) in current liabilities:
Trade and other payables
Contract liabilities
Cash generated from operations
Decrease / (increase) in long term loans - net
Increase in customer security deposits
Contributions by the Company - net
Workers' Profit Participation Fund paid
Workers' Welfare Fund paid
Finance cost paid
Income taxes paid
Net cash generated from operating activities
June 30, 2024 | June 30, 2023 | |
--- (Pak Rupees in '000) --- | ||
16,604,514 | 17,586,324 | |
1,958,289 | 1,911,593 | |
(24,019) | (7,165) | |
850,136 | 898,043 | |
398,174 | 381,764 | |
143,258 | 109,558 | |
(176,267) | 230,985 | |
(111,238) | 936,362 | |
540,243 | 482,778 | |
1,570,724 | 1,366,106 | |
21,753,814 | 23,896,348 | |
(474,408) | (285,364) | |
(1,470,748) | (8,691,823) | |
(4,512,309) | (712,944) | |
2,138,115 | (1,050,624) | |
219,257 | (2,790,051) | |
(477,153) | 3,718,818 | |
(213,210) | (33,971) | |
(4,790,456) | (9,845,959) | |
16,963,358 | 14,050,389 | |
42,094 | (78,030) | |
31,458 | 6,906 | |
(296,744) | (260,001) | |
(1,420,562) | (1,156,357) | |
- | (5,987) | |
(1,212,449) | (1,112,632) | |
(6,480,505) | (5,081,071) | |
7,626,650 | 6,363,217 | |
Nestlé Pakistan Limited
Condensed Interim Statement of Cash Flows (continued)
For the six month period ended June 30, 2024 (un-audited)
Cash flow from investing activities
Purchase of property, plant and equipment
Sale proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flow from financing activities
Long-term loans obtained
Short-term borrowings obtained
Short-term borrowings repaid
Lease rentals paid
Dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
The annexed notes 1 to 13 form an integral part of these financial statements.
KOMAL ALTAF | JOSELITO JR AVANCENA |
Chief Financial Officer | Chief Executive Officer |
June 30, 2024 | June 30, 2023 | |
--- (Pak Rupees in '000) --- | ||
(1,511,654) | (725,192) | |
38,553 | 28,339 | |
(1,473,101) | (696,853) |
- 1,461,405
12,400,000-
(8,000,000) | - | ||||
(89,035) | (136,064) | ||||
(8,376,473) | (1,656,241) | ||||
(4,065,508) | (330,900) | ||||
2,088,041 | 5,335,464 | ||||
(1,938,287) | (3,213,893) | ||||
149,754 | 2,121,571 | ||||
SYED YAWAR ALI
Chairman / Director
Nestlé Pakistan Limited
Notes to the Condensed Interim Financial Statements
For the six month period ended June 30, 2024 (un-audited)
1. Legal status and nature of business
Nestlé Pakistan Limited ("the Company") is a public limited company incorporated in Pakistan - under the repealed Companies Ordinance, 1984 (now Companies Act, 2017) - and its shares are quoted on Pakistan Stock Exchange. The Company is a subsidiary of Société des Produits Nestlé S.A. (SPN), the Holding Company, which in turn is a wholly owned subsidiary of Nestlé S.A., the Ultimate Parent Company, incorporated in Switzerland.
The Company is principally engaged in manufacturing, processing and sale of dairy, nutrition, beverages and food products including imported products. Registered office (which is also the Head Office) of the Company is situated at Packages Mall, Shahrah-e-Roomi, PO Amer Sidhu, Lahore, previously it was situated at Babar Ali Foundation Building, 308 Upper Mall, Lahore.
The geographical locations and addresses of the Company's manufacturing facilities are as under:
Manufacturing Facilities | Address |
Sheikhupura factory | 29-km Lahore - Sheikhupura Road, Sheikhupura, Pakistan |
Kabirwala factory | 10-km, Khanewal Road, Kabirwala, District Khanewal, Pakistan |
Port Qasim factory | Plot No. A23, North Western Industrial Area, Port Qasim Karachi, Pakistan |
Islamabad factory | Plot No. 32 Street No 3 Sector I-10/3 Industrial Area Islamabad, Pakistan. |
2. Basis of preparation
2.1 Statement of compliance
These condensed interim financial statements comprise the condensed interim statement of financial position of the Company as at Mar 31, 2024 and the related condensed interim statement of profit or loss, the condensed interim statement of comprehensive income, the condensed interim statement of changes in equity and the condensed interim statement of cash flows together with the notes forming part thereof.
These condensed interim financial statements are un-audited and are being submitted to the shareholders as required under section 237 of the Companies Act, 2017 and the Listing Regulations of Pakistan Stock Exchange Limited.
- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) and Islamic Financial Accounting Standards ("IFAS") issued by the Institute of Chartered Accountants of Pakistan as notified under the Companies Act 2017; and
- Provisions of and directives issued under Companies Act, 2017.
Where the provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34 and IFAS, the provisions of and directives issued under the Companies Act, 2017 have been followed.
These condensed interim financial statements do not include all the information required for annual financial statements and should be read in conjunction with the annual audited financial statements as at and for the year ended December 31, 2023. Comparative condensed interim statement of financial position is stated from annual audited financial statements as of December 31, 2023, whereas comparatives for condensed interim statement of profit or loss, condensed interim statement of comprehensive income, condensed interim statement of changes in equity and condensed interim statement of cash flows and related notes are extracted from condensed interim financial statements of the Company for the three-month period ended Mar 31, 2023.
2.2 Judgements and estimates
The preparation of financial statements in conformity with approved accounting standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions and judgments are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. In preparing these condensed interim financial statements, the significant judgements made by the management in applying accounting policies and key sources of estimation were the same as those that were applied to and disclosed in the financial statements as at and for the year ended December 31, 2023.
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