Revaluation losses as a result of devaluation of Nigeria’s currency have slowed the profits of Unilever Nigeria Plc, one of Nigeria’s biggest manufacturing goods firms by 17 percent in the first half of 2023.
Findings by BusinessDay showed the firm’s profit after tax slowed by 17 percent to N91.4 billion in the first half of 2023 from N110 billon recorded in the corresponding period of 2022.
The company reported a 38.66 percent increase in the cost of sales in the first half of 2023, amounting to N41.11 billion compared to N29.60 billion recorded in the same period of 2022.
This surge in costs was attributed to revaluation loss and increased restructuring expenses.
Revaluation loss rose to N14.36 billion from N1.06 billion, while restructuring cost increased to N2.36 billion from N0.48 billion in the first half of 2022.
Unilever stated that the revaluation loss arose from foreign currency-denominated balances related to trade loans.
Additionally, the restructuring cost included the write-off of raw and packaging materials due to the halt in production in the home care category and associated redundancy expenses.
“Revaluation loss arising from foreign currencies denominated balances in respect of trade loan. Included in the restructuring cost are raw and packaging materials written off due to the stoppage of production in the home care category and associated redundancy cost,” the company said.
Despite the challenges, the company’s revenue increased to N54.21 billion in the first half of 2023 compared to N43.81 billion in the same period of 2022.
Revenue from food products accounted for 51.75 percent of the total revenue, experiencing an increase of 41.17 percent to N28.05 billion in the first half of 2023 from N19.87 billion in the first half of 2022.
Revenue from home and personal care products also grew by 9.3 percent to N26.16 billion from N23.93 billion in the same period of 2022.
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Operating expenses decreased by 8.68 percent to N10.2 billion in the first half of 2023 from N11.17 billion in the same quarter of 2022.
Other income witnessed a decline of 20.89 percent to N52.73 million from N66.66 million in the same period of 2022.
On the financial front, finance income surged by 283.77 percent to N1.75 billion in the first half of 2023 from N0.456 billion in the same quarter of 2022, primarily due to increased interest on call deposits and bank accounts.
Unilever Nigeria’s profit for the period amounted to N2.76 billion in the first half of 2023, up from N1.91 billion recorded in the first half of 2022.
The company’s total equity and liabilities for the period amounted to N148.67 trillion.
The net cash flow generated from operating activities increased to N15.52 billion in the first half of 2023 from N8.26 billion recorded in the same period of 2022.
Net cash flows in investing activities showed a profit of N1.29 billion in the first half of 2023, compared to a loss of N0.182 billion in the first half of 2022, primarily due to interest received during the period.
However, net cash used in financing activities recorded a loss of N0.393 billion in the first half of 2023, lower than the loss of N0.397 billion in the same period of 2022.
Unilever Nigeria’s cash and cash equivalents at the end of the period amounted to N82.73 billion, showing growth from N63.38 billion recorded in the same period of 2022.
