Nestlé Q3/9M:2025 Earnings Note | A Slow but Steady March Back to Positive Equity
NESTLE posted a notable earnings rebound in 9M:2025, supported by lower finance costs and a reversal from FX losses. Consequently, it recorded its first quarterly profit of NGN21.91bn, after four consecutive quarters of losses, bringing its 9M:2025 Profit-After-Tax (PAT) to NGN72.48bn.Finance costs declined sharply by 85.05% YoY in 9M:2025 to NGN55.17bn, reflecting a 20.29% YtD reduction in total debt and a NGN20.75bn FX gain. Consequently, the company’s interest coverage ratio improved to 3.27x (vs. 0.30x in 9M:2024), underscoring a stronger debt-servicing capacity.
On the balance sheet, negative shareholders’ equity narrowed by 78.65% YtD to NGN19.70bn, and we anticipate a return to positive total equity by 2025FY (NGN7.56bn), driven by sustained earnings recovery.
Looking ahead, we expect higher demand and relative FX stability to sustain topline momentum into Q4:2025. Accordingly, we maintain our STRONG BUY rating on NESTLE Nigeria Plc, with an upwardly revised 12-month target price of NGN2,867.59 (previously NGN1,892.56), implying a 49.74% upside from the closing price of NGN1,915.00 as of October 31st, 2025.
Nestle Milkpak is engaged in the production, sale and export of dairy products, confectionery, culinary products and fruit juices. Co.'s products include Milkpak Milk, Milkpak Butter, Milkpak Uht Cream, Milkpak Desi Ghee, Nido powdered milk, Milo Powder chocolate energy food drink, Milo RTD, Nescafe Classic instant coffee, Frost fruit drinks, Nestle Orange Juice, Lactogen infant milk formula, Cerelac infant cereal, Nestle Rice infant cereal, Nestle Wheat infant cereal, Neslac growing up milk, Maggi 2-Minute Noodles, Nestle Sweet Treats dessert mixes, Polo mints and candies, Kitkat, Smarties, Fox's, Nestle Lion, Nestle Crunch, Nestle Classic milk chocolate and Nestle Pure Life bottled water.
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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