Unilever Nigeria records US$22.9m full year loss as declining sales dent performance

NIGERIA – Consumer goods firm, Unilever Nigeria Plc has reported a major contraction in the past business year, 2019 as a steep decline in sales left the company with a pre-tax loss of N8.3 billion (US$22.9m) compared with a profit before tax of N13.56 billion (US$37.43m) in 2018.

Key extracts of the financial statement of the company for the year ended December 31, 2019 showed that turnover dropped by 35 per cent from N92 billion (US$253.9m) in 2018 to N60.2 billion (US$166.1m) in 2019.

Gross profit dropped from N27.4 billion (US$75.6m) in 2018 to N6.67 billion (US$18.4m) in 2019. The company relapsed from operating profit of N10.43 billion (US$28.7m) in 2018 to operating loss of N10.35 billion (US$28.5m).

With a tax gain of N4.1 billion (US$11.31m) in 2019, net loss after tax stood at N4.2 billion (US$11.5m) as against profit after tax of N10.1 billion (US$27.5m) recorded in 2018.

Financing cost rose by 82 per cent to N824 million (US$2.2m) from N452 million (US$1.2m) in 2018.

The full-year report represented a major reversal for a company that reported a net profit of N3.5 billion (US$9.6m) in the first half.

The six-month report for the period ended June 30, 2019 had shown improvements in quarter-on-quarter performance but the half-year performance was considerably below comparable performance in 2018.

Total turnover for the first half 2019 stood at N42.6 billion (US$117.6m), 11 per cent below N48.1 billion (US$132.7m) recorded in comparable period of 2018. Profit after tax dropped by 37 per cent from N5.6 billion (US$15.45m) in first half 2018 to N3.5 billion (US$9.6m) in first half 2019.

However, the company recorded a considerable leap in the three-month second quarter to record a 24 per cent increase in its profit after tax at N1.9 billion (US$5.2m).

Turnover rose by 18 per cent in second quarter to N23.4 billion (US$64.5m) as against N19.2 billion (US$53m) in first quarter of 2019. During the period, profit after tax rose from N1.5 billion (US$4.1m) in first quarter 2019 to N1.9 billion (US$5.2m) in second quarter 2019.

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Cost of sales decreased marginally by 4.5 per cent from N32.8 billion (US$90.4m) in June 2018 to N31.3 billion (US$86.4m) in June 2019 in line with the decrease in turnover while cost of sales increased by 3.6 per cent to N15.9 billion (US$43.8m) in second quarter 2019 from N15.4 billion (US$42.5m) in first quarter 2019 also in line with the marginal increase in turnover in second quarter.

Unilever Nigeria assured shareholders of its efforts to ensure a sustained and steady growth in the company’s operations engineered to achieve better returns on their investments.

Managing Director, Unilever Nigeria Plc, Yaw Nsarkoh said although Unilever Nigeria continues to operate in a tough environment, it is now beginning to see momentum behind enhanced costs and operational efficiencies.

“Unilever Nigeria remains focused on its short- and long-term growth ambitions with clear emphasis on cost and operational efficiencies, increasing market share across key categories, reinvesting behind our iconic brands and improved route-to-market,” Nsarkoh said.

The company noted that its strategic initiatives rest on its global best practices, strong heritage as well as the professionalism of its people.

The Board of the company has appointed Carl Cruz as its new Managing Director to take over the management and leadership of the company effective 1st February 2020.

He comes with an extensive career experience in Unilever D & E Markets in Asia (Philipines, Thailand, India and Sri Lanka).

According to the statement signed by the Company Secretary, Unilever Nigeria, Abidemi Ademola, Cruz has done so well in terms of taking Unilever Sri Lanka to the next level.

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