Unilever Nigeria reports 167% growth in PAT to N1.906bn  in HY 2022 amidst cost pressure


By Philemon Adedeji

Unilever Nigeria Plc has released its unaudited financial statement for the half year H1 ended 30th June 2022, reporting growth of Profit After Tax (PAT) to a 167 per cent to N1.906 billion achieved in the half year H1 2022 from N714.80 million achieved in the half year H1 2021.

The profit was driven by other income of N66.659 million arising from transitional agreement income.

According to the company, subsequent to the disposal of the Tea business in October 2021, Unilever entered into a Transitional Service Agreement with the new owner, Unilever Tea MSO Nigeria Limited. The agreement will be in place for a period of 15 months, during which time Unilever would provide production and sales support to Unilever Tea MSO Nigeria Limited in exchange for a fee.

The group revenue grew significantly by 35.12 per cent to N43,806 billion in the half year H1 2022  from N32,420 billion generated in the half year H1 2021.

However, the cost of sales rose by 22 per cent to N29.605 billion in the half year H1 2022 as against N24.204 billion reported in the half year H1 2021

The increase in the exchange rate has compelled manufacturers to borrow at a high rate, thereby increasing the cost of production, made worse by the infrastructure deficiency which has inevitably transferred the high production cost to consumers. This has made manufacturers less competitive, shrinking their profit margins, as the Naira’s devaluation takes its toll on imported raw materials.

Aside increased cost of raw materials, some manufacturers, especially multinational consumer goods companies that have taken up foreign currency liabilities are also groaning under the pressure of the increased cost of the dollar.

The company finished 2021 year ended December 31 with a profit for the year of N3.409 billion as against a loss of N3.965 billion recorded in 2020.

Revenue grew to N73.523 billion from N52.211 billion, representing a growth of 35.07 per cent from the previous year. Cost of sales stood at the sum ofN50.161 billion in 2021 in contrast to N41.136 recorded a year earlier.

Based on the result, the Directors recommend to the shareholders the payment of a dividend in respect of year ended 31 December, 2021 of N2.873 billion, that is, 50 kobo gross per share which is payable on Friday, May 6, 2022 subject to the deduction of appropriate withholding tax.

Selling and distribution expenses grew by 54.7 per cent to N2.284 billion in 2022 from N1.476 billion in 2021 Gross profit rose by 72.8 per cent to N14.200 billion from N8.216 billion

Marketing and administrative expenses grew by 32.34 per cent to N8.884 billion from N6.713 billion

Finance income rose by 29.83 per cent to N456.507 million from N650.661 million.