Unilever Nigeria Plc suffered a major contraction in the immediate past business year as a steep decline in sales left the fast moving consumer goods company with a pre-tax loss of N8.3 billion.
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 in 2018 to N60.2 billion in 2019. The top-line decline amid steady increases in operating costs and expenses turned the bottom-line to red.
Gross profit dropped from N27.4 billion in 2018 to N6.67 billion in 2019. Notwithstanding cost control measures, the company relapsed from operating profit of N10.43 billion in 2018 to operating loss of N10.35 billion. Loss before tax stood at N8.3 billion in 2019 as against pre-tax profit of N13.6 billion in 2018. With a tax gain of N4.1 billion in 2019, net loss after tax stood at N4.2 billion as against profit after tax of N10.1 billion recorded in 2018.
The full-year report represented a major reversal for a company that reported a net profit of N3.5 billion 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, 11 per cent below N48.1 billion recorded in comparable period of 2018. Profit after tax dropped by 37 per cent from N5.6 billion in first half 2018 to N3.5 billion 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. Turnover rose by 18 per cent in second quarter to N23.4 billion as against N19.2 billion in first quarter of 2019. During the period, profit after tax rose from N1.5 billion in first quarter 2019 to N1.9 billion in second quarter 2019.
Cost of sales decreased marginally by 4.5 per cent from N32.8 billion in June 2018 to N31.3 billion in June 2019 in line with the decrease in turnover while cost of sales increased by 3.6 per cent to N15.9 billion in second quarter 2019 from N15.4 billion 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.
