Unilever Nigeria’s Profit Hits N2.8bn in First Quarter

• Unilever Nigeria’s Profit Hits N2.8bn in First Quarter

Unilever Nigeria Plc has announced improved financial performance for the first quarter (Q1) ended March 31, 2017. The results showed increases in both top and bottom-lines, raising expectations of stakeholders for a better performance at the end of the current year.

Unilever reported a revenue of N22.172 billion for Q1 of 2017, showing an increase of 32 per cent compared with N16.782 billion in the corresponding period of 2016. Cost of sales rose by 47 per cent from N10.749 billion to N15.879 billion, making the company to end the period with gross profit of N6.293 billion as against N6.033 billion in 2016.

Sales and distribution expenses went up by 23 per cent, while market and administrative costs fell by 22 per cent from N3.355 billion to N2.596 billion in 2017. However, finance costs increased by 32 per cent to N724 million, from N545 million. Profit before tax (PBT) improved by 53 per cent from N1.419 billion to N2.80 billion, while profit after tax (PAT) went up from N1.041 billion to N1.603 billion.

The company said it remained a consumer and customercentric business, as it continues to meet varying needs of Nigerians.

“The company will not relent in its efforts to satisfy its consumers. As a company, we will continue to deploy best practice marketing strategies, with high level of operational intensity; in our continued investment in commercial and factory operations to expand our capacity and grow our market share,” the company said.

In their assessment of the results, analysts at FBN Quest said compared with their estimates, Q1 sales were ahead by 17 per cent while PBT and PAT were ahead by wider margins, mainly due to the positive surprise on the sales line.

“On an annualised basis, while sales are tracking ahead of consensus full year estimate of N76 billion by 16 per cent, PBT and PAT are ahead by 87 per cent on average. Although forex exchange sourcing for raw material importation remains a challenge, any adverse effect has been offset by positives seen in the topline. We continue to believe that the larger consumer goods companies (like Unilever) are benefiting from weaker competition and thus able to grow market share,” they said.

Last week, Unilever announced plans to raise N63 billion via a rights issue and FBN Quest said: We believe the company intends to de-leverage its balance sheet and partly raise funds for planned local manufacturing capacity expansion for its personal care business in the South-West region.”