Unilever Nigeria suffered a revenue loss of 40% for the three months period ended June 2020 according to information contained in its 2020 half year report. The company reported a revenue of N14 billion between April and June 2020 compared to N23.4 billion for the same period in 2019.
The drop in revenues negatively impacted its half year 2020 results when compared to same period last year. For the first half this year (January to June 2020) Unilever reported N27.3 billion compared to N42.6 billion same period last year. The drop in revenue threw the company into a loss per share of 9 kobo compared to 61 kobo same period in 2021.
Why the drop? A cursory review of the results reveal the company’s food product segments fell to N7.8 billion this quarter compared to N12 billion same period last year. Its other major division, Home & Personal Care division fell from N12 billion to N6.1 billion. Despite the year on year drop, the operating expenses remained almost flat.
Pointers: Unilever is a consumer goods company that manufacturers and distributes household food and goods to millions of Nigerians. The second quarter revenues of N14 billion is the lowest we have seen since 2016 when Nairametrics started keeping records of their quarterly results. The results also provides another insight into the effects of Covid-19 on performance of listed companies, particularly those who service ordinary Nigerians.
In the news: Unilever skipped paying dividends in its most recent financial year following its N7 billion loss in 2019. The company has been recording declining profits for years culminating in a forced resignation of its former CEO. Last year the company Carl Raymond Cruz as the Company’s new Managing Director after its former Managing Director Yaw Nsarkoh was forced to resign.
In one of its first public comments on its results, the new CEO, Raymond Cruz highlighted as follows;
“Although we are not declaring dividend for FY 2019, we are optimistic because our results show that we made progress in some other critical areas of our operations which speaks to the fact that we are on the right path to growing our business for profitability and better returns on investment for our shareholders. Therefore, the task before the Board and Management is to drive our strategic objectives that would not only keep the business afloat but also ensure it operates efficiently,”
Unilever is behind several popular products like Close-Up toothpaste, Pepsodent toothpaste, LUX beauty soap, Lifebuoy soap, Rexona, Vaseline lotion and Vaseline Petroleum Jelly, OMO Multi-Active Detergent, Sunlight washing powder, Sunlight washing bar soap and Sunlight Dishwashing liquid, Pears Baby Product ranges among others. Its Food products include Lipton Yellow Label Tea, Knorr bouillon cubes in the Foods Unit, Royco bouillon cubes, etc. The company had, in 2018, sold off its Spreads business which includes the household name brand Blueband Magarine.