Condensed interim financial information for the nine months ended September 30, 2024
GOOD FOOD, GOOD LIFE
Docusign Envelope ID: 1FB1269B-D958-4744-B4DB-41316F92C6C5
NESTLÉ PAKISTAN LIMITED
DIRECTORS' REVIEW
The Directors of Nestlé Pakistan Limited (the "Company") are submitting the interim report, along with the condensed interim financial statements of the Company for the nine-month period ended September 30, 2024.
Business Performance Review:
Sales for the nine-month period ended September 30, 2024, stand at PKR 149.2 billion, reflecting a decline in growth by 1.3% compared to the same period last year. The economic environment remained challenging after imposition of taxes introduced in the 2024-25 Finance Bill, which were passed onto consumers through price increases putting pressure on the topline growth. Lower topline along with headwinds in commodity and energy prices further deteriorated gross profit margin. The continued investment behind brands, coupled with a loss in scale, adversely impacted the operating profit.
The financial performance for the nine months period is summarized below:
Jan - Sep 2024 | Jan - Sep 2023 | Change | |
PKR Million | PKR Million | ||
Sales | 149,230 | 151,153 | -1.3% |
Gross Profit | 53,307 | 55,442 | -3.9% |
% of sales | 35.72% | 36.68% | |
Operating Profit | 24,470 | 29,633 | -17.4% |
% of sales | 16.40% | 19.60% | |
Net Profit after tax | 12,286 | 15,791 | -22.2% |
% of sales | 8.23% | 10.45% | |
Earnings per share | 270.91 | 348.21 | -22.2% |
Future Outlook:
The management maintains a cautious outlook towards its business performance and future growth, while remaining focused on optimization across the value chain.
For and on behalf of the
Board of Directors
Joselito Jr Avancena | Syed Yawar Ali |
Chief Executive Officer | Director |
Lahore
Dated: October 24, 2024
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Condensed Interim Statement of Financial Position
As at September 30, 2024 | |||
(Un-audited) | (Audited) | ||
Sep 30, 2024 | Dec 31, 2023 | ||
--- (Pak Rupees in '000) --- | |||
EQUITY AND LIABILITIES | |||
Share capital and reserves | |||
Authorized capital | |||
75,000,000 (2022: 75,000,000) ordinary shares of PKR 10 each | 750,000 | 750,000 | |
Issued, subscribed and paid up capital | 453,496 | 453,496 | |
Share premium - capital reserve | 249,527 | 249,527 | |
General reserve - revenue reserve | 280,000 | 280,000 | |
Cash flow hedge reserve - revenue reserve | - | - | |
Accumulated profits - revenue reserve | 15,995,420 | 9,605,034 | |
16,978,443 | 10,588,057 | ||
Non-current liabilities | |||
Long-term finances - secured | 1,416,270 | 7,922,288 | |
Lease liabilities | 1,617,626 | 1,602,346 | |
Deferred taxation | - | - | |
Long-term employee benefits | 5,491,393 | 3,108,871 | |
8,525,289 | 12,633,505 |
Current liabilities
ASSETS
Non-current assets
Property, plant and equipment Capital work-in-progress Deferred taxation Long-term loans
Current assets
(Un-audited) | (Audited) |
Sep 30, 2024 | Dec 31, 2023 |
--- (Pak Rupees in '000) ---
29,193,816 28,697,131
2,506,391 3,091,540
3,309,844 2,000,463
233,626 270,633
35,243,677 34,059,767
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 - interest free Income tax payable
Unclaimed dividend Unpaid dividend
Contingencies and commitments
6,500,000
3,500,000
2,037,236
48,224,118
494,574
240,730
314,764
1,833,480
90,081
-
63,234,983
88,738,715
124,596
5,500,000
3,038,001
56,858,675
708,464
469,982
241,973
121,746
90,081
7,514,831
74,668,349
97,889,911
Stores and spares Stock-in-trade Trade debts
Current portion of long-term loans Sales tax refundable - net
Advances, deposits, prepayments and other receivables Cash and bank balances
4,241,456 4,011,709
29,318,419 33,438,484
3,378,980 2,232,611
141,705 149,709
11,550,095 17,168,509
2,826,790 5,729,408
2,037,593 1,099,714
53,495,038 63,830,144
88,738,715 97,889,911
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 |
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Condensed Interim Statement of Profit or Loss
For the nine-month period ended September 30, 2024 (un-audited) | |||||
Nine-month period ended | Three-month period ended | ||||
Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2024 | Sep 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)
149,229,592
(95,922,256)
53,307,336
(24,242,344)
(4,594,733)
24,470,259
(2,283,868)
(1,754,657)
(4,038,525)
355,405
20,787,139
(8,501,307)
12,285,832
270.91
151,153,266
(95,711,720)
55,441,546
(21,219,679)
(4,588,499)
29,633,368
(1,955,813)
(3,088,404)
(5,044,217)
448,885
25,038,036
(9,246,810)
15,791,226
348.21
41,545,472
(27,952,251)
13,593,221
(6,707,086)
(1,635,321)
5,250,814
(713,144)
(358,730)
(1,071,874)
114,922
4,293,862
(1,966,559)
2,327,303
51.32
49,723,087
(32,460,099)
17,262,988
(7,547,672)
(1,467,590)
8,247,726
(589,707)
(561,114)
(1,150,821)
354,807
7,451,712
(2,646,413)
4,805,299
105.96
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 |
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Condensed Interim Statement of Comprehensive Income
For the nine-month period ended September 30, 2024 (un-audited)
Nine-month period ended
Sep 30, 2024 Sep 30, 2023
--- (Pak Rupees in '000) ---
Three-month period ended
Sep 30, 2024 | Sep 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 gain / (loss) on cash flow hedges - effective portion
Related tax
12,285,832
-
-
-
15,791,226
(4,628)
2,339
(2,289)
2,327,303 | 4,805,299 |
- | - | |
- | - | |
- | - |
Total comprehensive income for the period | 12,285,832 | 15,788,937 | |
The annexed notes 1 to 13 form an integral part of these financial statements.
2,327,303 | 4,805,299 | |
KOMAL ALTAF | JOSELITO JR AVANCENA | SYED YAWAR ALI |
Chief Financial Officer | Chief Executive Officer | Chairman / Director |
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Condensed Interim Statement of Changes in Equity
For the nine-month period ended September 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
nine months ended September 30, 2023
Profit after taxation
Other comprehensive income
Transaction with owners directly recognized in equity
Final dividend for the year ended December 31, 2022 (Rs. 95 per share)
Interim dividend for the six-month period ended June 30, 2023 (Rs. 121 per share)
Balance as at September 30, 2023 (un-audited)
Total comprehensive income for the three months ended December 31, 2023
Profit after taxation
Other comprehensive income
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 nine-month period ended September 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. 95 per share)
Interim dividend for the six-month period ended June 30, 2024 (Rs. 121 per share)
Balance as at September 30, 2024 (un-audited)
453,496 | 249,527 | |||
- | - | |||
- | - | |||
- | - | |||
- | - | |||
- | - | |||
453,496 | 249,527 | |||
- | - | |||
- | - | |||
- | - | |||
- | - | |||
453,496 | 249,527 | |||
- | - | |||
- | - | |||
- | - | |||
- | - | |||
- | - | |||
453,496 | 249,527 | |||
280,000
-
-
-
-
-
280,000
-
-
-
-
280,000
-
-
-
-
-
280,000
2,289 | 4,784,934 | 5,770,246 | ||||
- | 15,791,226 | 15,791,226 | ||||
(2,289) | - | (2,289) | ||||
(2,289) | 15,791,226 | 15,788,937 | ||||
- | (4,308,212) | (4,308,212) | ||||
- | (5,487,302) | (5,487,302) | ||||
- | 10,780,646 | 11,763,669 | ||||
- | 701,573 | 701,573 | ||||
- | 526,344 | 526,344 | ||||
- | 1,227,916 | 1,227,916 | ||||
- | (2,403,529) | (2,403,529) | ||||
- | 9,605,034 | 10,588,057 | ||||
- | 12,285,832 | 12,285,832 | ||||
- | - | - | ||||
- | 12,285,832 | 12,285,832 | ||||
- | (861,642) | (861,642) | ||||
- | (5,033,804) | (5,033,804) | ||||
- | 15,995,420 | 16,978,443 | ||||
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 |
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Condensed Interim Statement of Cash Flows
For the nine-month period ended September 30, 2024 (un-audited)
Cash flow from operating activities
Profit before taxation
Adjustment for non-cash charges and other items:
Depreciation on property, plant and equipment
Impairment (reversal) / charge - net
Gain on disposal of property, plant and equipment - owned
Gain on disposal of property, plant and equipment - leased
Provision for Workers' Profit Participation Fund
Provision for Workers' Welfare Fund
Increase in provision for stores and spares
Increase / (decrease) in provision for stock in trade
Reversal of allowance for expected credit losses
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
Advances, deposits, prepayments and other receivables
Increase / (decrease) in current liabilities:
Trade and other payables
Contract liabilities
Cash generated from operations
Decrease in long term loans - net
Increase / (decrease) in customer security deposits - interest free 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
Sep 30, 2024 | Sep 30, 2023 | |
--- (Pak Rupees in '000) --- | ||
20,787,139 | 25,038,036 | |
2,956,586 | 3,858,736 | |
- | 389,042 | |
(48,143) | (119,680) | |
4,630 | - | |
1,063,134 | 915,146 | |
514,618 | 349,316 | |
475,477 | 35,621 | |
183,831 | (30,976) | |
- | (7,717) | |
(28,054) | 45,965 | |
2,840,493 | 793,124 | |
2,283,868 | 1,840,228 | |
31,033,579 | 33,106,841 |
(705,224) | (411,147) | |
3,936,234 | (2,317,721) | |
(1,146,369) | 1,014,566 | |
8,521,032 | (4,338,212) | |
(7,921,689) | 693,326 | |
(213,890) | 119,802 | |
2,470,094 | (5,239,386) | |
33,503,673 | 27,867,455 | |
45,011 | 36,611 | |
72,791 | (26,276) | |
(463,989) | (454,746) | |
(1,614,143) | (655,032) | |
(648,423) | (294,812) | |
(2,348,533) | (1,641,295) | |
(8,098,954) | (5,297,567) | |
20,447,433 | 19,534,338 | |
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Condensed Interim Statement of Cash Flows (Continued)
For the nine-month period ended September 30, 2024 (un-audited)
Cash flow from investing activities
Sep 30, 2024 Sep 30, 2023
--- (Pak Rupees in '000) ---
Fixed capital expenditure
Sale proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flow from financing activities
Long-term loans obtained
Long-term loans repaid
Short-term borrowings obtained
Short-term borrowings repaid
Short term borrowings - net (less than 90 days)
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.
(2,892,907)
68,298
(2,824,609)
-
17,300,000
(19,300,000)
-
(273,903)
(13,410,277)
(15,684,180)
1,938,644
(1,938,287)
357
(2,602,970)
202,186
(2,400,784)
-
(3,698,319)
9,000,000
(11,917,473)
2,500,000
(138,600)
(9,598,316)
(13,852,708)
3,280,846
(41,190)
3,239,656
KOMAL ALTAF | JOSELITO JR AVANCENA | SYED YAWAR ALI |
Chief Financial Officer | Chief Executive Officer | Chairman / Director |
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Notes to the Condensed Interim Financial Statements
For the nine-month period ended September 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 Sep 30, 2023 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 nine-month period ended September 30, 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.
Docusign Envelope ID: 8DC0732F-1753-4F0B-94D0-0CE5D6B342EE
Nestlé Pakistan Limited
Notes to the Condensed Interim Financial Statements
For the nine-month period ended September 30, 2024 (un-audited)
3. Summary of significant accounting policies
- The accounting policies and the methods of computation adopted in the preparation of these condensed interim financial statements are the same as those applied in the preparation of the financial statements for the year ended December 31, 2023, except as mentioned in note 3.2.
-
The Company adopted following new amendments to the approved accounting standards which became effective during the period, however these are not considered to be relevant or have any significant effect on the financial statements:
New Standards, Interpretations and Amendments
IAS 1 | Classification of Liabilities as Current or Non-current and Non- |
current Liabilities with Covenants - Amendments | |
IFRS 16 | Lease Liability in a Sale and Leaseback - Amendments |
IAS 7 and IFRS 7 | Disclosures: Supplier Finance Arrangements - Amendments |
The Company expects that above mentioned standards will not have any material impact on the Company's condensed interim financial statements in the period of initial application.
- Property, plant and equipment
Opening balance - net book value Additions during the period / year
Land and building(on freehold land) Plant and machinery
Furniture and fixtures Vehicles
IT equipment Right-of-use assets
Book value of property, plant and equipment disposed off during the period / year
Depreciation charged during the period / year Impairment (charged)/ reversed during the period / year Closing balance - Net book value - Contingencies and commitments
(Un-audited) | (Audited) | |
Sep 30, 2024 | Dec 31, 2023 | |
----- (Rupees in '000) ----- | ||
28,697,131 | 29,386,433 | |
549,244 | 211,732 | |
2,694,144 | 2,016,792 | |
11,258 | 56,565 | |
- | 6,918 | |
223,410 | 581,166 | |
- | 427,379 | |
3,478,056 | 3,300,552 | |
32,175,187 | 32,686,985 | |
(24,785) | (51,641) | |
(2,956,586) | (3,894,705) | |
- | (43,508) | |
29,193,816 | 28,697,131 | |
5.1 There has been no significant change in the status of the contingencies reported in the annual audited financial statements for the year ended December 31, 2023.
(Un-audited) | (Audited) | |||
Sep 30, 2024 | Dec 31, 2023 | |||
----- (Rupees in '000) ----- | ||||
5.2 | Guarantees | |||
Outstanding guarantees | 630,832 | 720,895 | ||
5.3 | Commitments | |||
5.3.1 | Letters of credit | |||
Outstanding letters of credit | 5,824,562 | 9,890,632 | ||
5.3.2 Commitments in respect of capital expenditure | 482,870 | 325,031 | |
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