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Unilever Nigeria Plc has defiled the laws of gravity as the consumer goods giant returned to the path of profit even amid currency risk, stiff competition from unlisted brands, and deteriorating infrastructure.
For the first nine months through September 2023, Unilever posted a profit after tax (PAT) of N1.66 billion from a loss after tax of N348 million.
The major driver of the bottom line is an uptick in revenue bolstered by a hike in key products which helped fend off the impact of rising input costs as sticky inflation continues to wage war on consumers whose pockets have been squeezed.
Sales spiked by 25.95 percent to N81.57 billion in September 2023 from N64.76 billion the previous year.
The company that manufactures and markets foods and refreshments, home care and beauty and personal care products is making profit from core operations as earnings before interest and taxation (EBIT) surged by 216.35 percent to N1.72 billion as at September 2023.
There were fears among analysts and investors that foreign exchange loss brought on by abrupt currency devaluation and spiraling interest rates all brought on by a central bank that seeks to stabilise the economy would undermine the bottom line (profit).
The National Bureau of Statistics (NBS) says Nigeria’s headline inflation rate increased to 26.72 percent in September 2023, the highest in two decades.
The Nigeria 10 year government Bond has a 14.964 percent yield, according to data from World Government Bonds. Although the company has reverted to the path of profitability, it is not retaining more capital.
Gross profit margin reduced to 23.78 percent in the period under review from 26.52 percent the previous year.
The company shares were down 1.41 percent to close at N12.95 as of October 20, 2023 in Lagos. It has a year to date return of 17.24 percent, underperforming the NGXASI.