The Irish division of food brands behemoth, Nestlé, made a loss of €70 million last year after a writedown in the value of its investment in its baby formula plant in Limerick, which sold 30 per cent less to China in 2021.
Nestlé Ireland, which owns Wyeth Nutritionals in Limerick, increased its turnover last year by more than 16 per cent to €116 million, while it broke even on an operating basis. But the writedown in its Wyeth investment pushed it deep into the red in its recently filed accounts.
The company also scrapped its dividend in 2021, having paid a dividend the previous year of almost €67 million, having made a loss that year of almost €56 million.
The accounts say the Irish division of the group, whose brands include KitKat, Cheerios and Cat Chow pet food, will continue to be funded by its Swiss parent in a cash-pooling arrangement. The Irish operation’s immediate parent, Nestlé in the UK, has also committed to supporting the business here.
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Accounts signed off in September show the impairment charge of €69.98 million is attributed to its direct subsidiary Wyeth, which employs about 500 people at its plant in Askeaton in Limerick. It is a major supplier of infant formula to China, and the factory has been visited in the past by Chinese government officials.
Separate accounts for Wyeth Nutritionals Ireland show its sales plunged last year by almost 30 per cent to €220.6 million, due to a similar-sized fall in sales volumes. Much of this was due to upheaval in its business in China, where it says the mix of products changed. Staff numbers fell by almost 100.
Wyeth still made money in 2021, however. It recorded a profit for the year of €10.9 million, down from €16.5 million in 2020. It had accumulated profits on its balance sheet of €168 million. Meanwhile, its parent Nestlé's net assets stood at €296 million.
Wyeth incurred restructuring charges last year of about €8.8 million, while it also wrote down its own assets by more than €11.2 million.
