Unilever Nigeria Plc, a prominent manufacturing goods firm in Nigeria, faced a 17 percent decline in its profits during the first half of 2023, primarily due to revaluation losses resulting from the devaluation of the country's currency.
In the first six months of 2023, the company's profit after tax slowed to N91.4 billion from N110 billion recorded in the corresponding period of 2022.
The cost of sales witnessed a significant increase of 38.66 percent, amounting to N41.11 billion in H1 2023 compared to N29.60 billion in H1 2022. The surge in costs was attributed to revaluation losses and increased restructuring expenses.
Revaluation loss soared to N14.36 billion from N1.06 billion, while restructuring costs rose to N2.36 billion from N0.48 billion in the first half of 2022. Unilever stated that the revaluation loss was linked to foreign currency-denominated balances related to trade loans, while the restructuring cost included write-offs of raw and packaging materials due to the halt in production in the home care category and associated redundancy expenses.
Despite these challenges, Unilever's revenue increased to N54.21 billion in H1 2023 from N43.81 billion in H1 2022. Revenue from food products accounted for 51.75 percent of the total revenue, experiencing a substantial increase of 41.17 percent to N28.05 billion in H1 2023 from N19.87 billion in H1 2022. Revenue from home and personal care products also grew by 9.3 percent to N26.16 billion from N23.93 billion in the same period of 2022.
Operating expenses decreased by 8.68 percent to N10.2 billion in H1 2023 from N11.17 billion in the same quarter of 2022. However, other income witnessed a decline of 20.89 percent to N52.73 million from N66.66 million in the same period of 2022.
On the financial front, finance income surged by 283.77 percent to N1.75 billion in H1 2023 from N0.456 billion in the same quarter of 2022, primarily due to increased interest on call deposits and bank accounts.
Unilever Nigeria's profit for the period amounted to N2.76 billion in H1 2023, up from N1.91 billion recorded in H1 2022. The company's total equity and liabilities for the period amounted to N148.67 trillion.
While net cash flow generated from operating activities increased to N15.52 billion in H1 2023 from N8.26 billion recorded in the same period of 2022, net cash flows in investing activities showed a profit of N1.29 billion in H1 2023, compared to a loss of N0.182 billion in H1 2022, primarily due to interest received during the period.
However, net cash used in financing activities recorded a loss of N0.393 billion in H1 2023, which was lower than the loss of N0.397 billion in the same period of 2022.
Unilever Nigeria's cash and cash equivalents at the end of the period amounted to N82.73 billion, demonstrating growth from N63.38 billion recorded in the same period of 2022. Despite the challenges posed by the currency devaluation, the company remains resilient and continues to strive for sustained growth and profitability.
