Q3 2020: Unilever Nigeria eyes profitability despite macroeconomic headwinds
Unilever Nigeria recorded a turnover of N17.39 billion in the quarter ended 30th September 2020, according to its unaudited report for the period. This represents a 21 percent increase compared to the second quarter 2020 result and a 93.9 percent increase compared with N8.97bn recorded in the third quarter of 2019.
Even though the company recorded a loss after tax of N1.5bn for the quarter, it represents a 49 percent improvement from a loss after tax of N3.0bn recorded in the corresponding quarter of 2019.
The firm experienced significant revenue growth in two market segments, specifically food products, and home and personal care. A close look reveals that revenue from food products rose to N9.83 billion from N5.32 billion in the same period last year, while home and personal care revenue climbed to N7.57 billion from N3.65 billion.
Unilever had a 25.1 percent q/q growth in food revenue, implying that the firm increased market share. This may be indicative of the positive effects of the efforts of the new management.
Some analysts, while acknowledging the challenging environment in which companies operated in this year, would like to see Unilever go back to an enviable position of profit. This will be no mean feat, with all the foreign exchange and trade restrictions experienced by many companies within the country.
In 2020, coronavirus pandemic affected many manufacturers in Nigeria, disrupting their supply chains and revenue streams. Declared a pandemic by the WHO, it has precipitated widespread multisectoral disruption, tasked the global health system, and sparked unprecedented economic upheaval.
As the pandemic raged across the globe, manufacturing hubs shut down, governments enforced restriction of movement and billions of people were placed on lockdown.
According to the World Bank, Nigeria’s economy is projected to contract by about 4 percent in 2020. Data from the National Bureau of Statistics reveal Nigeria’s unemployment rate as in the second quarter of 2020 stood at 27.1 percent indicating that about 21,764,614 Nigerians remain unemployed. Inflation figure in September 2020 was creeping close to 14 percent. This was the economic reality when Unilever Nigeria released its unaudited report for the period ended 30th September 2020.
With the pandemic, the lockdown and the recent social unrest taking its toll on the economy and many businesses in the country, it is hoped that Unilever Nigeria will remain focused on its strategy to deliver sustainable growth, remaining true to its past optimism of growing the business both in the medium and long term, with a clear emphasis on operational efficiency and cost optimisation, increasing market share across key categories and improved route-to-market.