• Wednesday, February 21, 2024
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BusinessDay

Unilever’s net operating income hits N5.1bn, highest in six years

Unilever’s net operating income hits N5.1bn, highest in six years

Unilever, one of Nigeria’s major consumer goods firms, has recorded Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of N5.1 billion in the first quarter of 2023.

Data sourced from the firm’s latest financials showed Unilever’s EBITDA grew by 88 percent to N5.1 billion from N2.72 billion in the corresponding period of 2022.

EBITDA is a widely used measure of core corporate profitability; it lets investors assess corporate profitability net of expenses dependent on financing decisions, tax strategy, and discretionary depreciation schedules.

Unilever‘s EBITDA Margin grew by 7.0ppts to 20.6 percent in Q1 2023 from 13.6 percent in Q1 2022.

The EBITDA margin is a performance metric that measures a company’s profitability from operations. Also, it is an earnings measure that focuses on the essentials of a business: it’s operating profitability and cash flows.

Further findings by BusinessDay showed the firm’s operating expenses saw an increase of 45 percent, rising to N11.89 billion from N8.2 billion.

The increase in OPEX can be attributed to an increase in selling and distribution costs which increased by 47 percent to N10.6 billion from N7.2 billion recorded in the same period of last year while marketing and administrative expenses amounted to N1.26 billion from N1 billion recorded in the same quarter of last year.

Despite this, the company also recorded a rise in its top line, as reflected in its financial statement.
Operating profit increased to N4.56 billion in the first quarter of the year, a 108 percent increase from N2.19 billion recorded in the same period of last year

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Revenue grew by 19.7 percent to N24.6 billion in the first quarter of 2023 from N20.6 billion recorded in the same quarter of 2022.

The Food segment – Blue Band, Knorr and Royco, recorded a growth of 39.1 percent in its revenue to N13.3 billion in the first quarter of 2023 from N9.6 billion recorded in the first quarter of 2022, with a 50 percent contribution.

Also, the home and personal care products segment grew marginally by 0.1 percent to N11.28 billion in the first quarter of 2023 from N11.26bn in the first quarter of 2022.

“Looking ahead, we expect the company’s revenue to be mainly driven by the Food Product segment due to the company’s recent corporate notice to exit its Home and Personal care segment (a large contributor) owing to unsustainable business conditions,” Goke Adetoyinbo, an analyst at CSL Stockbrokers Limited said in a statement.

Profit after tax also grew by 49 percent to N2.67 billion in the first quarter of 2023 from N1.79 billion recorded in the corresponding period of 2022; gross Profit also grew by 7.2 percent to N10.6 billion in the first quarter of the year from N7.2 billion recorded in the previous year.

Finance income however declined by 35.4 to N183.4 million recorded in the first quarter of 2023 from N284 million recorded in the same period of 2022 as a result of interest on third-party bank loans which amounted to N437 million in the first quarter of 2023.

Total assets for the first quarter of 2023 amounted to N135.4 billion from N125.4 recorded in the same period of last year.

Net cash flow generated from operating activities amounted to N11.9 billion from N4.9 recorded last year as a result of cash generated from operations which increased to N12.1 billion, a 138 percent increase.

Cash and cash equivalents at the end of the period increased by 28.5 percent to N78.1 billion from N60.8 billion recorded in the same period of last year.