Unilever Nigeria Plc made two major shifts on the side of costs that dried up profit from over N1 billion in the second quarter of last year to N110 million for the three months ended June 2022.
Net finance income had contributed over 60 percent of the pre-tax profit of about N751 million the company reported for the second quarter of last year. The drop this year resulted in a decline of over 16 percent in pre-tax profit to N628 million for the second quarter.Tax expenses consumed 82.4 percent of the pre-tax profit, leaving N110 million for the company in the bottom line. That is a tiny fraction of the sales revenue of over N23 billion the company generated for the quarter.
The turnover for the period represents an accelerated growth of 35 percent year-on-year compared to a 24.5 percent improvement in the first quarter. Management is pushing the sales at a lower input cost than achieved in the preceding financial year. The reduction is the key turnaround driver from a loss of nearly N4 billion the company posted in 2020 to a moderate recovery in 2021 and sustaining recovery in the current financial year.
Unilever had no interest bearing debt in its balance sheet at the end of half year operations while the upsurge in finance expenses came mostly from exchange losses of over N430 million.The half year reading shows a drop of almost 30 percent in finance income to N456.5 million and a jump of about 14 times in finance cost to about N629 million. That caused a plunge from net finance income of N605 million to net finance cost of N172 million over the review period.