The Nigerian economy has been bedevilled by several macroeconomic doldrums, which have affected the operations of several organisations, threatening a spree of downsizing and rightsizing amidst a decline in margins.
Businesses have been constrained by the high-cost environment of the Nigerian economy especially in recent times, with the headline inflation rate already at 22.04 percent in March 2023.
Amid rising inflation, a BusinessDay survey showed that Nigerian consumer goods firms recorded a 27 percent rise in selling and distribution costs in the first quarter of 2023.
The consumer goods firms surveyed include Nigerian Breweries, Nestle, BUA Foods, Nascon, Cadbury, Unilever, Champion Breweries, and Dangote Sugar.
Firm-by-firm analysis
Nigerian Breweries
Nigerian Breweries recorded the highest distribution cost of N33.7 billion in the first quarter of 2023, 3.4 percent increase from N32.59 billion in the first quarter of 2022.
The firm’s administrative expenses stood at N8.22 billion, up 10.3 percent from N7.45 billion in the reviewed period.
Nigerian Breweries incurred a loss of N10.72 billion in the first quarter of 2023 from N13.61 billion in the first quarter of 2022. Net Revenue amounted to N123.31 billion, a 10.5 percent decline from N137.77 billion in the comparable period.
Nestle
Nestle ranked in second place with marketing and distribution costs which stood at N19.34 billion in the first quarter of 2023, a 36 percent increase from N14.22 billion in the first quarter of 2022.
Administrative expenses amounted to N3.66 billion, 39.7 percent increase from N2.62 billion in the comparable period.
Nestle’s profit for the period stood at N16.21 billion in the first quarter of 2023, a 10 percent decline from N17.98 billion in the first quarter of 2022. Revenue rose to N127.97 billion, 16 percent increase from N110.23 billion in the reviewed period.
BUA Foods
BUA Foods stood in third place with distribution cost which rose to N6.29 billion in the first quarter of 2023, a 788 percent increase from N708.34 million in the first quarter of 2022.
Administrative expenses rose to N2.62 billion, up 72.4 percent from N1.52 billion in the reviewed period.
The firm’s net profit after tax increased to N40.47 billion, 77.2 percent increase from N22.84 billion. Turnover jumped 60.2 percent to N144.32 billion from N90.07 billion in the comparable period.
Nascon
Nascon’s distribution cost stood at N3.47 billion in the first quarter of 2023, a 79.8 percent increase from N1.93 billion in the first quarter of 2022.
Administrative expenses stood at N1.01 billion, a 42 percent increase from N711.5 million in the comparable period.
Nascon’s profit after tax rose to N1.64 billion, up 324 percent from N386.37 million while revenue stood at N16.9 billion, 57.1 percent increase from N10.76 billion in the reviewed period.
Cadbury
Cadbury ranked in fourth place with distribution cost which stood at N1.56 billion in the first quarter of 2023, 54.5 percent increase from N1.01 billion in the first quarter of 2022.
Administrative expenses dropped 16.6 percent to N259.97 million from N311.66 million in the reviewed period.
The firm’s profit for the period stood at N3.45 billion, 124 percent increase from N1.54 billion. Revenue stood at N16.56 billion, 29.5 percent increase from N12.79 billion in the comparable periods.
Unilever Nigeria
Unilever Nigeria’s selling and distribution cost stood at N1.26 billion in the first quarter of 2023, 24.8 percent increase from N1.01 billion in the first quarter of 2022.
Marketing and administrative expenses stood at N4.55 billion, up 12.1 percent increase from N4.06 billion in the reviewed period.
The firm’s profit for the period amounted to N2.67 billion, a 48.3 percent increase from N1.8 billion. Revenue grew to N24.61 billion, 19.7 percent increase from N20.56 billion in the comparable period.
Champion Breweries
Champion Breweries’ distribution cost stood at N289.11 million in the first quarter of 2023, 29 percent increase from N224.2 million in the first quarter of 2022.
The firm’s administrative expenses rose to N329.74 million, up 66 percent from N198.5 million in the reviewed period.
Champion Breweries’ loss for the period stood at N96.58 million in the first quarter of 2023 from a profit of N554.2 million in the first quarter of 2022.
The firm’s revenue however dipped 19 percent to N2.59 billion from N3.19 billion in the comparable period.
Dangote Sugar
Dangote Sugar’s distribution cost stood at N174.56 million in the first quarter of 2023, 33 percent drop from N260.81 million in the first quarter of 2022.
Administrative expenses rose to N2.75 billion, 22.8 percent increase from N2.24 billion in the reviewed period.
Dangote Sugar’s profit for the year amounted to N12.8 billion, 44.3 percent increase from N8.87 billion. Revenue increased to N102.22 billion, 8.2 percent increase from N94.45 billion in the comparable periods.
