Despite an increase in revenue, Unilever Nigeria, one of the players in fast moving consumer goods space and a subsidiary of Unilever Overseas Holding B.V, posted a significant loss in the first quarter of 2021, the company’s profit between January and March fell by 144 percent, moving from 1.1 billion to -N491 million.
This is despite a 46 percent increase it its revenue as it earned N19.4 billion which is an upward tick from the N13.3 billion it realized in 2020. The company’s revenue was gotten from the sale of its products within and outside Nigeria, however the domestic sale of its food products constituted the bulk of its income.
Its gross profit grew by 31 percent to N4.4 billion in 2021 from N3.4 billion in the previous year, while its marketing expenses grew by 63 percent from N2.3 billion to N3.8 billion in the period under review.
Unilever’s cost of sales however grew by 51 percent, moving from N9.9 billion to N14.9 billion, this affirms the view of experts that most of the consumer goods firms have been facing significant cost pressures affecting company’s profit.
Further analysis of the company’s financial statement show that its net finance income plunged by 69 percent to N152 million from N495 million in 2020 driven largely by a weaker finance income which fell by 62 percent to N186 million from N495 million.
The company’s assets grew marginally by two percent to N93.2 billion in 2021, from N91.5 billion in the corresponding period of 2020. However the company noted in its report, a plan to sell off part of its manufacturing facility within the Home and Personal Care segment at the carrying amount of N262 million, it adds that the sale is expected by June 2021 as the transaction has reached an advanced stage.
Furthermore, in a statement made available to the Nigerian stock exchange signed by the company’s secretary Abidemi Ademola, Unilever announced the approval to implement the separation of the tea business in Nigeria.
The company’s Nigerian tea business will be transferred to a newly incorporated tea company in Nigeria New TeaCo held under a newly incorporated tea holding company within the Unilever group.
“The assets being transferred by Unilever Nigeria plc to New TeaCo include production assets and other tangible assets used exclusively in relation to the Tea Business; distribution rights to Tea products in Nigeria and export markets; and locally owned unregistered intellectual property rights,” it stated.
Unilever Nigeria will however retain ownership of the site at Agbara, while still providing intercompany services to the New TeaCo Group during the transitional period
As one of the largest players in Nigeria’s fast moving consumer goods industry (FMCG), Unilever s principally involved in the manufacture and marketing of foods and refreshments, home care, beauty and personal care products.