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This positive financial performance was largely attributed to an increase in net finance income, which rose to N3.179bn ($7.6 million) from a loss of N70m ($169,000) in 2022. Despite a substantial 215% rise in finance costs to N1.034bn ($2.5 million) and a tax imposition of N1.481bn ($3.6 million), Q3 losses were reduced by 51.60% to N1.091bn ($2.6 million) from N2.254bn ($5.4 million) in 2022.
The company also noted an increase in revenue by 30.57% to N27.371bn ($66 million) from N20.962bn ($50 million) in 2022. The Managing Director, Tim Kleinebenne, attributed this positive performance to the 4G growth model, operational efficiency, purposeful brands, and a focus on health and hygiene initiatives for Nigerians.
As part of its business continuity measures and growth strategy focusing on higher growth opportunities, Unilever Nigeria Plc is exiting the home care and skin cleansing category, discontinuing products like Vaseline, Omo, Lux, Dove, Lifebuoy, and Rexona. This strategic shift includes digitization and simplification of processes and reduction in currency exposure with expected profitability improvement. InvestingPro Tips suggests this is a smart move, as Unilever operates with a high return on assets and has maintained dividend payments for 32 consecutive years, which can be viewed in more detail here. Production for the home care category stopped in June, and sales halted in September, while the skin cleansing category’s cessation extends to December 2023.
Kleinebenne emphasized Unilever’s commitment to expanding its market share and driving socioeconomic impact as Nigeria’s longest-serving manufacturing company and a centenary old institution, underpinned by continuous investment in Nigerian operations. The company’s P/E Ratio stands at 14.02, and the adjusted P/E Ratio for LTM2023.Q2 is 16.36, according to InvestingPro data, indicating that the company is trading at a low P/E ratio relative to near-term earnings growth, another InvestingPro Tip that highlights Unilever’s strong position in the market.
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