Unilever Nigeria, a fast-moving consumer goods company, has reported its highest revenue in at least 13 years, according to data compiled by BusinessDay.
The company’s latest full-year unaudited financial statement shows its revenue rose to N97.4 billion in 2023 from N64.6 billion in the previous year.
The company’s after-tax profit also surged to N8.54 billion from N4.47 billion.
“Unilever’s topline performance during the period was strong in our view, driven by festive season gains and commendable double-digit growth in the food products and the beauty and wellbeing and personal care segments, despite consumer downtrading,” analysts at Cordros Research said in a note on Monday.
Last year was challenging for consumers and businesses in Africa’s largest economy as a result of the cash scarcity, removal of petrol subsidy and naira devaluation.
The general inflation rate, which has been in double digits since 2016, increased consistently for the 12th straight month in December. This has weakened the purchasing power of cash-strapped Nigerians, put a strain on disposable incomes among households and impacted the operations of many businesses.
Data from the National Bureau of Statistics (NBS) shows that inflation rose to 28.92 percent last month from 28.20 percent in November. Food inflation, which constitutes 50 percent of the inflation rate, rose to 33.93 percent from 32.84 percent in the previous month.
Inflation impacted the food, beverage and tobacco subsector of the manufacturing sector in the third quarter as its growth rate slowed to 0.92 percent from 4.33 percent in Q2.
“Consumers’ confidence has been affected by inflation. So, there is very little that people can buy. People are cutting down on components in the subsector,” Muda Yusuf, chief operating officer of the Centre for the Promotion of Private Enterprise, said.
Unilever’s statement also revealed that export revenue rose by 145.9 percent to N2.68 billion. It reported a loss from discontinued operations of N3.73 billion, up from N1.49 billion in 2022.
On March 17, 2023, the company announced that it would exit the homecare and skin cleansing categories in December.
“Subsequent to the company’s exit from the Home Care and Skin Cleansing categories, the factory buildings have been leased to a third party for a duration of 10 years, with annual rental payments,” the company said in its financial statement.
It said income from operating leases, where the company serves as the lessor, is recognised in the income statement using a straight-line basis over the entire lease term.
Finance income rose to N17.13 billion from N9.11 billion, primarily due to its marketing and administrative expenses reduced to N13.33 billion from N14.12 billion on the back of a decline in royalties.
However, selling and distribution costs increased to N29.87 billion from N26.33 billion.
Other income increased to N986.9 million from N161.85 million, driven by promissory notes.
“Included under other income is the income derived from a discounted promissory note issued by the Federal Government of Nigeria, pertaining to prior-period Export Expansion Grants. A total amount of N616 million was discounted,” the company said.
The net cash flow from operating activities stood at N2.69 billion, down from N12.03 billion.
Net cash flows from investing activities was N1.24 billion, while net cash used in financing activities incurred was N7.27 billion.
The cash and cash equivalents at the end of the period declined to N56.61 billion from N66.32 billion primarily due to a reduction in fixed deposits.
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