Unilever announces 51% decline in profit

Unilever announces 51% decline in profit

…proposes N189.2 million dividend

Unilever Nigeria Plc has announced 51 per cent decline in profit for the period ended December 21, 2015 to N1.19 billion from N2.41 billion recorded in 2014.

Similarly, profit before tax declined 38.4 per cent to N1.77 billion from N2.87 billion posted the same period of 2014.

With decline in profitability, the board of Unilever has approved total sum of N189 million dividend, payable to its shareholders on May 13, 2016.

Further analysis showed that the soap and detergent company recorded a marginal growth of 6.2 per cent in revenue to N59 billion in 2015 from N N55.74 billion in the review period of 2014.

The decline in profit can be attributable to hike in finance cost that rose by 66 per cent in the year under review to N3.17 billion from N1.9 billion recorded in the prior year.

According to Cordros analysts, the company’s performance was strong in the fourth quarter (October to December). The result positively surprised, considering that Unilever had a disappointing run over the first nine months of 2015.

Revenue surged by 36.3 per cent year-on-year (y/y) and 18.2 per cent quarter-on-quarter (q/q) during the period.

Cordros said, “the revenue growth, a record high, ended consecutive y/y declines in Q3 and Q2. While acknowledging the possible impact of seasonal sales on the growth, we also note the base-effect of a disappointing sales record in Q4-2014 (-15.8 per cent y/y and -15.5 per cent q/q).

“Considering consumers’ increasing sensitivity to prices, we are attuned to link the revenue growth to be volume driven,” the Cordros report added.