Unilever Nigeria’s profit drops by 53% in Q1

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Unilever Nigeria’s profit drops by 53% in Q1
April 20, 2020

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Unilever Nigeria continued on the decline in the first quarter of this year as the conglomerate’s bottom-line compressed further by 53 per cent.

Key extracts of the three-month report for the period ended March 31, 2020 released at the weekend indicated that Unilever Nigeria suffered top-down declines in sales and profitability, continuing the slowdown that marked its 2019 performance.

Turnover dropped from N19.24 billion in first quarter 2019 to N13.33 billion in first quarter 2020. Gross profit declined from N3.87 billion to N3.43 billion. Operating profit slumped to N453.45 million in first quarter 2020 compared with N1.32 billion in first quarter 2019.

Profit before tax dropped by 53 per cent to N948.47 million in 2020 as against N2.03 billion in 2019. With tax gains, net profit after tax increased to N1.11 billion in first quarter 2020, but still below N1.52 billion recorded in comparable period of 2019. Earnings per share stood at 19 kobo by March 2020 as against 26 kobo posted by March 2019.

Unilever Nigeria had witnessed a general decline in performance in 2019 as the company struggled with sluggish market and declining margins. The audited report for the year ended December 31, 2019 had shown that turnover dropped from N92.89 billion in 2018 to N60.5 billion in 2019. The company recorded a loss after tax of N7.42 billion in 2019 as against net profit of N10.55 billion in 2018.

The company attributed the decline in performance to challenging operating conditions and its corporate decision to tighten credit terms to address exposure from trade receivables and excess stock in trade in order to position for innovation and a return to competitive growth.

Unilever Nigeria had stated that it was better placed to adjust to the prevailing operating circumstances now emerging in 2020.

Corporate Affairs Director, Unilever Nigeria Plc, ‘Soromidayo George stated that given the current uncertainty, the company would continue to monitor the business environment as well as focus on its strategy to deliver sustainable growth both in the medium and long term.

George noted that the business acknowledged that 2019 was a challenging year for everyone, but also that there were measures taken to adjust those challenges.

She reaffirmed Unilever Nigeria’s commitment to support efforts to tackle the Coronavirus threat while keeping their eyes on the fundamentals of the business, supporting its brands, ensuring the integrity of the route-to-market model, and putting consumers and their needs at the heart of everything we do.

She said Unilever Nigeria’s outlook remains attractive based on the legacy of growth and strong Unilever brands which have over the years satisfied consumers’ needs, and will continue to do so innovatively.