TUE JAN 28 2025-theGBJournal|Unilever Nigeria Plc, leading manufacturer of household consumable products reported revenue growth of 50.3% y/y in Q4-2024, in line with expectations but saw rising operating expenses stall profitability.
Q4-24 unaudited results published on Monday, shows that the Unilever’s revenue rise was driven largely by significant growth in the Food Products (+64.4% y/y | 68.5% of revenue) and Beauty & Wellbeing (+204.0% y/y | 11.3% of revenue) segments, which offset the decline in the Personal Care (+4.3% y/y | 20.3% of revenue) segment.
”We believe higher pricing was the key driver of the strong revenue performance during the quarter,” Cordros Research analyst tells theG&BJournal.
Unilever export sales (+27.6% y/y | 2.8% of revenue) also grew, supported by a higher FX rate. Sequentially, revenue rose by 14.9% q/q, reflecting the pricing adjustments.
Gross margin improved, rising by 65bps to 28.1% (Q4-23: 21.6%), owing to the faster increase in revenue (+50.3% y/y) relative to costs (+37.8% y/y).
The increase in costs, as reflect in the result, was as a result of rising raw material costs following the sticky inflation print and depreciation of the naira.
Notably, UNILEVER’s EBIT (-258bps y/y to 16.3%) and EBITDA (-334bps y/y to 18.0%) margins were weakened by a surge (+44.8x y/y) in operating expenses.
Precisely, the higher OPEX outturn was driven by a substantial increase (+97.6% y/y) in brand and marketing expenses for the quarter, with the impact of the naira devaluation on foreign-denominated obligations also driving overhead costs (+153.5% y/y to NGN11.27 billion) higher.
The company reported a net finance income of N300.00 million in the quarter (vs net finance cost of N2.62 billion in Q4-23), owing to a faster decline in finance costs (-97.8% y/y to N90.00 million).
For 2024FY, net finance income increased by 153.2% y/y to N4.13 billion driven by the higher income (3.9x to N3.44 billion) from foreign exchange gain on bank balances.
Overall, profit before tax declined by 24.0% y/y to N7.78 billion in Q4-24 (Q4-23: N10.23 billion).
After accounting for a tax expense of N2.88 billion (Q4-23: N1.90 billion), UNILEVER reported a 50.0% decline in profit after tax to N4.90 billion (Q4-23: N9.80 billion).
The company reported a 29.2% decline in standalone earnings per share to N0.85 (Q4-23: N1.20), bringing 2024FY EPS to N2.77 (2023FY: N2.86).
The decline in standalone earnings per share is attributed to the spike in operating expenses (+44.8x y/y to N6.27 billion) during the quarter.
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