Goddy Egene
Unilever Nigeria Plc has reported a profit after tax (PAT) of N1.207 billion for the half year ended June 30, 2021, compared to a loss of N1.634 billion in the corresponding period of 2020. The company recorded a revenue of N19.724 billion in 2021, up from N14.008 billion in 2020, and profit before tax (PBT) of N1.041 billion in 2021 as against a loss before tax of N1.515 billion in 2020. PAT printed at N1.207 billion, up from a loss of N1.633 billion in 2020, thereby raising investors’ hopes for good dividend at the end of the year.
Analysing the results, analysts at Cordros Securities said its revenue grew by 40.8 per cent following strong growth in revenue across the Home & Personal Care Products (HPC) (+48.7 per cent) and Food (+34.6 per cent) segments.
“Although the business could not implement a substantial price increase due to the heightened competition, we believe the top-line growth was driven by a gradual increase in credit sales to distributors following the substantial progress made in reducing its trade receivables between 2018 and 2020 (-82.4 per cent),” they said.
According to them, Unilever’s earnings were further supported by the growth in finance income primarily due to the increase of N7.07 billion in cash and bank balance to N44.17 billion in Q2-21 from N37.10 billion as of December 2020. “Similarly, the company recorded a net operating profit of N557.86 million in Q2-21, which is the highest since Q2-19 compared to a net operating loss of N1.86 billion in Q2-20. Overall, the company recorded a PBT of N1.04 billion – the highest in eight quarters as opposed to a loss before tax of N1.52 billion in Q2-20. Similarly, PATN1.21 billion was boosted by a tax credit of N166.14 million, translating into an earnings per share (EPS) of N0.21 for the period,” they explained.
The analysts said they liked that the company overturned the prior quarter’s loss with a decent top-line growth bringing the H1-21 EPS to N0.21 amidst the sub-inflationary price increase across its product portfolio.
“In addition, we believe that the company management’s gradual increase in credit sales will remain supportive of volume growth in the near term. As such, we now expect Unilever to deliver positive earnings in 2021,” they stated.
Meanwhile, trading at the stock market opened for the week on a positive note as the Nigerian Exchange (NGX) Limited All-Share Index (ASI) recorded a marginal growth of 0.01 per cent to 37,952.65. Trading activities was mixed as volume traded rose by 73.5 per cent to 462.8 million while value traded fell by 60.6 per cent to N1.2 billion.
