Unilever’s cost of sales grapples 73.5 percent of the firm’s total revenue of N64.77 billion in the third quarter of this year, BusinessDay analysis shows.
The consumer goods firm saw its revenue up 30.4 percent to N64.77 billion from N49.67 billion recorded in the third quarter of 2022.
Despite the surge in revenue, the firm recorded a loss of N348 million in its third quarter financial result which is as against a profit of N1.08 billion in the third quarter of last year.
According to CSL Research, cost of sales (adjusted for depreciation) grew faster than revenue as global inflation and Naira devaluation continued to impact raw materials import, up 34.6 percent year on year to N46.28 billion in 9M 2022 from N34.39 billion in 9M 2021.
Unilever’s cost of sales surged 33 percent to N47.6 billion in the third quarter of 2022 from N35.8 billion in the third quarter of 2021.
Over the years, the cost of sales obtained most of the firm’s revenue. The cost of sales obtained 72 percent of the revenue in the third quarter of last year.
Also, it accounted for 77.7 percent, 81.4 percent, and 68.4 percent in 2020, 2019, and 2018 respectively, BusinessDay analysis shows.
Further analysis by BusinessDay showed Unilever’s food segment contributed the sum of N30.6 billion (47.3%) while the home and personal care segment contributed N34.1 billion(52.6%) to the total revenue of N64.77 billion.
Unilever’s food segment includes the sale of nutrition while home and personal care include the sale of skincare and oral care products, fabric care, and household cleaning.
Food product revenue grew to N30.6 billion in the third quarter of this year from N21.4 billion in the third quarter of last year, indicating a 43 percent year-on-year increase.
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Home and personal care contribution to revenue dropped 31 percent to N34.1 billion from N49.6 billion in the third quarter of 2021.
“While we expect sustained upbeat in the demand for the company’s food products, the personal care segment may see a further decline in demand as consumers adjust their spending pattern in favor of most basic needs amidst weakening purchasing power,” said analyst at CSL Research in a note.
The consumer goods firm spent the sum of N3.47 billion on selling and distribution in the third quarter of this year, up 52.2 percent from N2.28 billion in the third quarter of last year.
Finance income surged to N887 million in the third quarter of 2022, up 33 percent from N665.8 million in the third quarter of 2021.
Unilever spent N4.6 billion on brand and marketing in the third quarter of 2022, up 12.2 percent from N4.1 billion in the third quarter of 2021.
The firm paid N1.61 billion as service fees in September 2022, up 34 percent from N1.2 billion in September 2021.
Inventories grew 20 percent to N18 billion in September 2022 from N15 billion in December 2021.
Trade and other payables surged 42 percent to N56.4 billion in September 2022 from N39.7 billion in December 2021.
Trade and other receivables climbed 42 percent to N21.3 billion in September 2022 from N15 billion in December 2021.
Total equity dipped 5 percent to N62.5 billion in September 2022 from N65.7 billion in December 2021.
Cash and cash equivalents amounted to N61.5 billion in September 2022, a 26.5 percent increase from N48.6 billion in September 2021.
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