Unilever Nigeria Plc Experiences 72.95% Pre-Tax Profit Drop Amidst Challenging Economic Conditions

Unilever Nigeria Plc’s Q2 2023 Unaudited Results Reveal 72.95% Pre-Tax Profit Decline to N169.9 Million

Unilever Nigeria Plc has recently disclosed its unaudited results for the second quarter of 2023, which showed a significant 72.95% decrease in pre-tax profits, amounting to N169.9 million. During the quarter under review, the company reported an operating loss of N3.2 billion, as costs surged beyond revenues.

The challenging economic conditions were fueled by a sharp 22.79% increase in the inflation rate in June 2023, impacting both businesses and consumers with rising costs of goods and services.

Despite the economic headwinds, the company experienced a growth in revenue, which reached N29.60 billion compared to N23.25 billion recorded in the same period last year, representing an impressive increase of 27.31%. This upswing in revenue was primarily driven by the strong performance of Unilever’s main business segments, particularly food products and home & personal care.

The food products segment generated N14.72 billion in revenue during the quarter, surpassing the N10.43 billion recorded in the same period last year. Similarly, revenue from the Home & Personal Care segment amounted to N14.88 billion, up from N12.81 billion in the corresponding period of the previous year.

However, Unilever did face some challenges, reporting losses of N3.28 billion due to the escalating costs of sales. The company had to undergo a restructuring process, leading to write-offs of raw and packaging materials, especially in the home care category, and incurring associated redundancy costs.

Key highlights from the financial report include:

1. Revenue for the quarter reached N29.60 billion, compared to N23.25 billion in the corresponding quarter of 2022.
2. Cost of sales increased to N27.11 billion from N16.22 billion recorded in the same period last year.
3. Gross profit declined to N2.49 billion from N7.03 billion reported last year.
4. Pre-tax profit for the quarter saw a sharp decline of 72.95% to N169.94 million from N628.28 million in Q2 2022.
5. Cash flow for the first half of 2023, ending on 30th June, amounted to N82.73 billion, marking a significant increase of 30.53% from N63.38 billion recorded in the same period last year.

The company continues to navigate the challenging economic landscape, aiming to address cost issues while leveraging its revenue growth to achieve long-term financial stability.