Earlier this month during its 93rd Annual General Meeting, Unilever Nigeria Plc declared a dividend of ₦2.87 billion for the fiscal year ended December 2017. The dividend, which translates to 50 kobo per share, was approved by the company’s shareholders.
Note that this amount represents about 659% increase compared to the ₦378 million that was declared the preceding year which translated to 10 kobo per share.
Speaking at the occasion, the company’s Chairman, His Royal Majesty Nnaemeka Achebe said that the higher dividend declared this year is indicative of Unilever’s business resilience, as well as a commitment to ensure that the company’s shareholders are rewarded for their investments.
He further stated that the company is committed to ensuring growth as well as higher returns for the shareholders, even as Nigeria’s economic outlook in 2018 continues to improve.
The company’s performance for the year ended December 31, 2017 shows impressive growth and resilience. We have remained focused on our short- and long-term growth ambitions with strong emphasis on operational intensity, cost efficiencies, growing market share across key categories as well as reinvesting in our iconic brands.-Achebe
Also commenting on the development was the company’s Managing Director, Yaw Nsarkoh who also stressed Unilever’s commitment to ensuring dividends for its shareholders.
Why the huge increase from 2016?
The company had recorded ₦90.77 billion in 2017, representing about 30% increase from 2016’s ₦69.78 billion. Profit after tax had also grown by 143% to 7.54 billion; up from ₦3.07 billion reported for the 2016 fiscal year.
Like most manufacturing companies in Nigeria. Unilever Nigeria Plc emerged from a serious economic recession in 2017, which also contributed to its positive performance.
In 2016, a bad economic recession, which was caused by poor oil prices, decreased external reserves and high exchange rates, affected the company’s revenues and decreased profitability.
To combat this problem, the company opted for a rights issue which opened on July and closed on September 2017. This move helped the company to offset its outstanding loans, while also supporting working capital.
It is yet to be seen whether the company, which recently finalised plans to divest its margarine business, will maintain its current trend of higher profitability and increased dividend payment.
The economy has, however, shown considerable improvement since 2017, with inflation rates falling, oil prices increasing, and exchange rates favourable. This presents an opportunity for businesses such as Unilever Nigeria to thrive.
Unilever Nigeria Plc engages in food processing and personal healthcare products. It was incorporated in 1923, and its shares are currently trading at ₦50.000 in today’s NSE session.