Unilever Nigeria Plc a leading consumer goods company in Nigeria declares in its unaudited annual financial report that it made a loss amounting to N1.59 billion in the year 2020.

This is according to the information and figures disclosed in the Company’s unaudited financial statement published by Unilever on the website of the Nigerian Stock Exchange.

The report revealed that the loss which Unilever made in 2020, was 62.3% lower than the loss it made in the preceding year 2019, as the company’s loss after tax declined from N4.22 billion in 2019 to N1.59 billion in 2020.

Key Highlights

• Revenue increased to N61.57 billion, up by 1.34% Y-o-Y.
• Cost of sales decreased to N47.79 billion, down by 11.63% Y-o-Y.
• Gross profit increased to N13.78 billion, up by 106.52% Y-o-Y.
• Selling and distribution expenses decreased to N2.82 billion, down by 10.53% Y-o-Y.
• Marketing and administrative expenses decreased to N12.99 billion, down by 1.69% Y-o-Y.
• Impairment loss on trade receivables increased to N1.08 billion, up by 49.73% Y-o-Y.
• Other income increased to 66.99 million, up by 2.44% Y-o-Y.
• Operating loss decreased to N3.05 billion, down by 70.54% Y-o-Y.
• Finance income decreased to N1.47 billion, down by 48.39% Y-o-Y.
• Finance costs decreased to N223.29 million, down by 72.91% Y-o-Y.
• Loss for the period decreased to N1.59 billion, down by 62.32% Y-o-Y.

Bottom line

In line with this, the revenue of the company increased by 1.34%, as revenue from the sales of tea and savoury in the food products segment of the company increased during the period under review. While sales of skincare, oral care products, fabric care, and household cleaning products declined in 2020.

However, it is important to note that Impairment loss on trade receivables, Selling and distribution expenses, as well as Marketing and administrative expenses incurred by Unilever, completely eroded Gross Profit of N13.78 billion to the tune of an Operating loss of N3.05 billion.

This went on to impact the profitability of the company in 2020, as Unilever reported a loss of N1.59 billion, despite doing well to keep finance costs low, and by so doing, reporting a net finance income of N1.25 billion.

The Central Bank of Nigeria (CBN) has frowned at activities of some International Money Transfer Operators (IMTOs) and unlicensed companies who continue to facilitate diaspora remittances into the country in Naira.

The apex bank’s reaction follows the contravention of its earlier directive that all diaspora remittances must be paid to the beneficiaries in dollars.

This disclosure was contained in a circular titled, ‘Modalities for Payout of Diaspora Remittances’, issued by the CBN on Friday, January 22, 2021, and signed by its Director Trade and Exchange Department, Dr O.S. Nnaji.

READ: CBN revokes licenses of 7 Payment Service Providers

What the CBN is saying

The CBN in its circular said, ‘’Further to our circular titled ‘Receipt of Diaspora Remittances: Additional Operational Guidelines’, it has come to our notice that some IMTOs and unlicensed companies continue to facilitate diaspora remittances into the country in Naira, “in clear contravention of the Central Bank of Nigeria directive that all remittances be paid to beneficiaries in dollars.’’

READ: More pressure on the naira as Diaspora remittances to drop by 20%

For the avoidance of doubt, the Central Bank of Nigeria further clarifies as follows;

1. Only licensed IMTOs are permitted to carry on the business of facilitating diaspora remittances into Nigeria;
2. All diaspora remittances must be received by beneficiaries in foreign currency only (cash and /or transfers to domiciliary accounts or recipients);
3. IMTOs are not permitted, under any circumstances, to disburse diaspora remittances in Naira (either in cash or by electronic transfers), be it through remittance settlement accounts (which had been earlier directed to be closed), third party accounts or via any other payment platforms within and/or around the Nigerian financial system.’’

READ: Nigeria’s forex devaluation timeline – 2020

The apex bank in the circular said that the measures were intended to promote transparency, grow diaspora remittances and significantly improve foreign exchange inflows into Nigeria.

The CBN warned that strict sanctions, including withdrawal of operating licenses, shall be imposed on any individuals and/or institutions found to be aiding, abetting or directly contravening these guidelines.

It went further to say that it shall not hesitate to authorize the closure of the accounts of unlicensed operators in Nigerian banks, including being barred from accessing banking services in Nigeria.

It promised continued monitoring of developments in this regard, adding that it would also issue further guidance as appropriate.

READ: Continuous increase in inflation rate may weaken economy – CBN report

What this means

With the insistence of the apex bank on its earlier directive, it means that Nigerians living in the diaspora can transfer foreign currency to their relatives and loved ones in the country, who in turn will withdraw the money in dollar cash and sell anywhere they so desire.

It means they can for instance receive foreign transfers such as Western Union or Moneygram, withdraw it in dollars and then sell at the black market rate or anywhere else they want to. This they believe will help to stabilize the exchange rate and discourage hoarding.

READ: UBS warns Bitcoins could disappear like Myspace

What you should know

• It can be recalled that the CBN, had in November 2020, amended the procedure for the receipt of diaspora remittances and insisted that it must be paid in dollars to the beneficiaries, in an apparent and frantic attempt to improve liquidity in the forex market and reduce the disparity between the black market and the official window.
• Also in an additional guideline for diaspora remittances, the CBN barred IMTOs from sending money to Mobile Money Operators and also stopped the integration of payment services providers to IMTO accounts. It also stopped switches and processors from getting involved in foreign remittances.

CitiTrust Financial Services Limited has disclosed that it has invested an additional N395.9 million for the purchase of an additional 659.8 million units of Living Trust Mortgage Bank (formerly known as Omoluabi Mortgage Bank) shares.

This is according to a disclosure signed by the firm’s secretary, Olabisi Fayombo, and sent to the Nigerian Stock Exchange, as seen by Nairametrics.

The breakdown of the transaction revealed that a total of N359.9 million were spent for the purchase of an additional 659,750,000 units at N0.60 per share, and on two different occasions, i.e., 18th and 19th of January, 2021.

Recall that in 2019, CitiTrust Financial Services (CFS) Group Plc became the majority shareholder in LivingTrust Mortgage Bank, after investing heavily into the bank, preparing the stage for the bank to be more efficient and competitive.

What you should know:

• Nairametrics earlier reported a much more improved revenue of N192 million for LivingTrust Mortgage Bank in its last reported financials-Q3, 2020.
• In 2014, LivingTrust listed its shares on the Alternative Securities Market (ASeM) of the Nigerian Stock Exchange and thus became the first company to do so.
• The transaction might be an indicator of increased investors’ confidence in the firm’s future and potentials.
• LivingTrust Mortgage Bank shares closed trading for the week at N0.60