UNILEVER NIGERIA'S LEVER OF HOPE

When Unilever Nigeria board of directors decided to recommend 5kobo per share dividend for the year 2015, they were only offering a lever of hope for the future. If not, there was nothing to cheer in 2015 performance talk less of bankrolling shareholders' smile to the bank.
According to the audited figures released with the proposed dividend news, in 2015 Unilever Nigeria's profit before tax dropped by 38.4% to N1771.1m from N2873.2m in 2014.
Besides, final profit attributable to shareholders tumbled by 73.3% to N762.4m from N2860m.
The growth in the company's revenue was fair in the light of the tough times. Total revenue was up 6.56% to N59601.1m from N55928.4m supported greatly by non-core income growth as core revenue rose by 6.22% to N59221.7m from N55754.3m.
Unilever Nigeria's had issues with all cost heads except marketing and administration which grew by only 4.35% to N13641.2m from N13044.8m. That is, behind revenue increase.
On its part, cost of goods sold rose ahead of revenue growth at 7.28% to N38174.2m from N35584m thus caging gross profit growth at 4.35%.
On the other hand, selling and distribution costs increased by 13% to N2844.1m from N2516.3m.
To cap it all, finance cost jumped by 66% to N3170.5m from N1910m although the effect of this was mitigated somehow by 79.2% rise in finance income to N301.9m from N168.5m.
Thus, gaining only N2.97 on each N100 income in 2015 compared to N5.14 in 2014 was certainly not cheery.
At the same Henates can not help noticing that Unilever Nigeria's liquidity position weakened some more in 2015 with working capital deficit rising to N13689.9m from N12799.6m and overdraft closing 2015 14.7% up at N4535.8m from N3953.4m
SO:
* Fine, foreign shareholders still have to be made happy by keeping to dividend payment traditions
* However, it must also be noted that liquidity position of the company could be stretched further in view of this and so, more cost control will be needed to realise any hope on the immediate future.

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