Unilever Nigeria quarterly profits plunge 45% to US$5.63m on persisting sales pressure

NIGERIA – Consumer goods firm, Unilever Nigeria Plc, has reported a 45% decline in profit before tax to US$5.63 million (N2.03bn) during its first quarter of 2019 down fromUS$10.26 million (N3.7bn) recorded in a similar period the previous year.

The firm’s unaudited interim financial statement revealed that its profit after tax also hurtled by 47.5% year-on-year to US$4.22 million (N1.52bn) from the US$8.04 million (N2.90bn) recorded in Q1 2018.

The total assets of the Nigerian Stock Exchange (NSE) listed company dropped to US$83.44 million (N30.08bn) in Q1 2019 from US$84.69million (N30.53bn) in Q1 2018, while total liabilities increased to US$139.42 million (N50.26bn) from US$111.1 million (N40.05bn).

Revenue generated in the first three months of this year declined to US$53.26 million (N19.2bn) from US$67.41 million (N24.3bn) in Q1 last year despite a reduction in cost of sales to US$42.72 million (N15.4bn) from US$48.82 million (N17.6bn).

Additionally, the marketing and administrative expenses reduced to US$4.16 million (N1.5bn) from US$6.38 million (N2.3bn), while the selling and distribution expenses went down to US$2.38 million (N859.5m) from US$3.05 (N1.1bn).

In December 2017, the firm announced unveiled plans of selling its entire spreads business (Blueband margarine) which was concluded in In July 2018 in line of the group’s commitment to pursue the directive, reports the Punch.

The company made N162.6m (US$0.45m) from the discontinued business operation, the financial statement for the three months period ended March 31st 2019 reveals.

Unilever said it had segmented its business into food products and home and personal care products such as the sale of tea, savoury and spreads, and the sale of fabric care, household cleaning, skin care and oral care products.

“There are no inter-segmental sales, and Nigeria is the company’s primary geographical segment as it comprises 99 per cent of the company’s sales,” the company noted in a statement.

According to economic analysts, the group’s revenue for the period reflects a downward trnd or three consecutive quarters, the most recent figure being the lowest since Q3 2016.

Trade disruption during the period, and increasing competitive landscape associated with a growing number of market players as well the still weak consumer demand were pointed out as major contributors.

As of January 1, 2019, the company’s dividend payable amount stood at US$8.79 million compared to US$8.02 million that was reported in the same period in 2018 of which it has paid US$1.32 million in dividends in the first quarter.

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