Weak sales stretch Unilever’s loss into second year

Unilever Nigeria Plc has reported a loss of N1.592 billion for 2020, its second time in two years, as the company’s turnover also touched its second lowest point since 2016.

The results raise worries over the firm’s capacity to deliver improved shareholder value soon, even though the loss this time seems minimal when compared to that of the preceding year.

Sales have been cruel to the Lagos-based household consumables maker since 2019, when sales tumbled by as much as N32.413 billion or 35 per cent. That set in motion a tortuous recovery process, which became complicated in the following year by the outbreak of the coronavirus. It was its first loss in at least nine years.

“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,” Nnaemeka Achebe, Unilever’s chair, said in July at the company’s last annual general meeting.

Revenue for 2020 marginally fell by 1.34 per cent to N61.572 billion, according to Unilever’s unaudited financial statements for the period issued on Friday by the Nigerian Stock Exchange (NSE).

The same day, the exchange informed the public that Unilever Overseas Holdings B.V. had newly purchased 27.080 million units of the firm’s shares to take the stake of the parent company to 74.5% or 4.280 billion shares.

Loss before tax fell by 77.4% per cent from to N1.956 billion, lifting hopes that the company could find full resilience soon.

Loss for the period declined to N1.592 billion from N4.224 billion, a 62.3 per cent drop.

Earnings per share was 62.2 per cent lower at -N0.28 compared to the -N0.74 posted in the corresponding period of 2019.