South African, Dharnesh Gordhon has resigned as the managing director of Nestle Nigeria Plc. His resignation takes effect from 1 October 2016. Nestle Nigeria Plc informed the Nigerian Stock Exchange (NSE) of the resignation today 28 September 2016.
The official reason for his resignation is his transfer to Nestle subsidiary in Indonesia. He was appointed to the position in June 2013.
He is leaving at a time the company’s half year results for the period ended June 2016 shows a 94% decline in net profit from N8.89 billion in June 2015 to N536 million for the half year ended June 2016. The sharp drop in profit came about despite an impressive 22% growth in revenues to N80 billion from N66 billion within the same period. Financial analysts say the drop in net profit is expected considering the sharp drop in the value of the naira from N199 to an average of N315 to the US$. The drop is due to revaluation losses incurred on the foreign component of loans on the company’s books.
From 2013 to full year 2015, with Gordhon as Managing Director, Nestle Nigeria revenues grew by approximately 14% from N133 billion in 2013 to N151 billion in 2015. Revenues for half year 2016 is already N80 billion and expectation is that full year revenue will be in excess of N160 billion. Also net profit has risen from N22 billion in 2013 to N24 billion in 2015 but is expected to drop significantly in 2016 after the company books revaluation losses from the weaker value of the naira.
Gordhon is being replaced in the position by a Mexican, Mauricio Alarcon who until his recent appointment was the Managing Director of Nestle Atlantic Cluster which covers Nestle’s businesses in Cote d’ Ivoire, Senegal, Guinea, Gambia, Mauritania and Cape Vert.
According to a statement from the company, Alarcon joined Nestle in 1999. He held a number of sales and marketing assignments in Nestle’s Ice Cream business in Mexico, including Marketing Advisor at the Ice Cream Strategic Business Unit in Switzerland and rose to become the Marketing Manager for the Ice Cream business in Australia.
He joined Nestle Egypt as Business Executive Manager in 2010, where he quickly transformed the business as the turnover from the Ice Cream business more than doubled and profitability also improved despite the challenging environment.
He is being counted on to bring his experience in managing in a challenging environment to bear in the currently challenging business environment in Nigeria.
Nestle Nigeria Plc remains the highest priced share on the Nigerian Stock Exchange with a closing price of N825 per share on 27 September despite 4.1% of its value since the beginning of the year. With a market capitalisation of N655 billion, it sells at 42.56 current earnings.
