Shareholders of Unilever Nigeria Plc last Friday reported a loss of N4.22 billion for the year ended December 2019, compared with N10.148 billion posted in 2018.
The shareholders of Unilever Nigeria had last year received a total dividend of N1.50 per share being part of profit recorded for the year and the benefit from the disposal of the company’s spreads business. However, the company has ended 2019 with a negative performance for the 2019 financial year.
Revenue fell 34 percent to N60.758 billion, from N92.023 billion, while gross profit fell faster by 75 percent from N27.42 billion to N6.67 billion. Financing cost rose by 82 percent to N824 million from N452 million in 2018. Loss before tax stood at N8.322 billion in 2019, compared with a profit before tax of N13.56 billion. Unilever Nigeria Plc posted a loss after tax of N4.224 billion as against a profit after tax of N10.1 billion in 2018.
Looking at the results, analysts at Greenwich Trust Limited, said in line their forecast, they noted a drastic slowdown in topline to settle at N60.76 billion against N92.03 billion recorded in 2018.
“Furthermore, Cost of sales (COS) dipped to print N54.09 billion against N64.60 billion recorded in 2018, however, COS declined at a slower pace than top-line, hence, we witnessed gross profit thin-out by 75.67 percent to record N6.672 billion vs N27.427 billion recorded in the corresponding period of 2018,” they said.
According to the analysts, operating profit recorded a loss as the company could not make enough sales to cover the total operating expenses.
“ Finance income came in lower by 20.42 percent while finance cost spiked by 82.3 percent, consequently recording a loss before tax of N8.32 billion. Tax credit of N4.10 billion cushioned the loss for the period to N4.22 billion, 141.62 percent decline when juxtaposed to N10.15 billion profit recorded in 2018. The report indicates the continued struggle for Unilever to increase its sales in light of increased competition in the Fast Moving Consumer Goods (FMCG) sector,” the analysts said.
In an apparent move to improve the fortunes of Unilever, the company has appointed Mr. Carl Raymond Cruz as the new managing director of the company effective February 1, 2020.
Cruz, who is a Filipino and is currently Chairman, Unilever Sri Lanka. The company said Cruz is coming with an extensive career in Unilever D & E Markets in Asia (Philipines, Thailand, India, and Sri Lanka)