Unilever Nigeria Plc, one of the leading consumer goods companies in the country, has reported remarkable growth in its revenue and profit for the year 2023, despite the challenging economic environment.
According to its unaudited financial statement, the company’s revenue increased by 50.8 percent to N97.43 billion in 2023, up from N64.64 billion in 2022. Its after-tax profit also surged by 91.1 percent to N8.54 billion, compared to N4.47 billion in the previous year.
The impressive performance was driven by improved cost margins, increased export revenue, and income from operating leases and promissory notes.
The company said its export revenue rose by 145.9 percent to N2.68 billion in 2023, as it leveraged its regional distribution network and strong brand portfolio to access new markets and expand its customer base.
Unilever Nigeria also benefited from the income derived from a discounted promissory note issued by the Federal Government of Nigeria, about prior-period Export Expansion Grants. A total amount of N616 million was discounted and recognized as other income in the financial statement.
The Export Expansion Grant (EEG) is a post-shipment incentive designed to encourage Nigerian exporters to increase their export volume, and value and improve their global competitiveness. The scheme was suspended in 2014 due to allegations of abuse and fraud but was revived in 2017 with some modifications.
Unilever Nigeria said it exited the homecare and skin cleansing categories in December 2023, following its announcement in March of that year. The company said it leased its factory buildings to a third party for 10 years, with annual rental payments. This resulted in a loss from discontinued operations of N3.73 billion, up from N1.49 billion in 2022.
The company said it focused on its core businesses of food and personal care products, which include brands such as Close-Up, Pepsodent, LUX, Lifebuoy, Rexona, Vaseline, Blue Band, Lipton, and Knorr.
Its marketing and administrative expenses were reduced to N13.33 billion from N14.12 billion, mainly due to a decline in royalties. However, its selling and distribution costs increased to N29.87 billion from N26.33 billion, as it invested more in advertising and promotions to boost its sales and market share.
The company’s finance income rose to N17.13 billion from N9.11 billion, mainly due to interest on call deposits and bank accounts.
Unilever Nigeria’s performance reflects the resilience and innovation of the consumer goods sector in Nigeria, which has faced several headwinds in recent years, such as currency devaluation, inflation, insecurity, and the COVID-19 pandemic.
The sector has also witnessed increased competition from local and regional players, as well as changing consumer preferences and behaviors.
However, some industry analysts have expressed optimism about the prospects of the sector, citing the large and growing population, the rising middle class, the untapped rural markets, and the potential for value-added products and services.
Unilever Nigeria said it remains committed to delivering value to its shareholders, customers, and other stakeholders, as it continues to execute its strategic transformation plan and enhance its operational efficiency.
Source: BusinessDay
