In what could be called an impressive performance in the last nine months ended September 2017, Unilever Nigeria Plc has recorded a growth of 206 per cent. According to the result, there is a revenue of N69.1 billion in 2017, up 38 per cent from N49.8 billion in the corresponding period of 2016, while sales and distribution expenses rose from N2.2 billion to N3.1 billion. Marketing and administrative expenses fell from N9.371 billion to N9.1 billion. Finance costs increased by 70.2 per cent from N1.75 billion to N2.98 billion in 2017. Also, net profit soared by 206 per cent from N1.6 billion to N4.8 billion in 2017.
In their company report released on Friday, market operators have expressed satisfaction and are positive of greater improvement once the finance costs is further reduced after the receipt of the proceeds of the last Rights Issue of N58 billion.
Analysts at Cordros Capital Limited while looking at the third quarter results, commented that revenue and net profit grew by 36.6 per cent and 142.7 per cent .
“Compared to our estimate, the reported revenue was ahead by two per cent while PAT lagged by 37 per cent on significantly higher-than-expected (278 per cent variance) finance charges,” they said.
The explained that finance costs increased by 48 per cent and 25 per cent q/q, on the repayment of short term USD intercompany loans.
“As at end September, gross debt stood at N7.96 billion, the lowest since Q1-14, suggesting – and validated by the N30.7 billion outflow reported under financing cash flow – that management has commenced the process of significantly deleveraging the balance sheet following the recently concluded rights issue. The higher-than-expected finance cost signal possible changes (presumably exchange rate) to the terms of the intercompany borrowings,” the analysts said.