Unilever Nigeria Plc saw a 30 percent drop in the top line revenues in the first quarter of 2020, its recently released unaudited financial report shows, reflecting a tough start to the year for the consumer goods giant.
The company recorded a significant drop in revenues from its major business segments which include a wide array of major brands such as Close-Up and Pepsodent toothpaste, LUX beauty soap, Vaseline lotion and petroleum jelly in the personal care unit; OMO Detergent, Sunlight washing powder, bar soap and dishwashing liquid; Pears baby product ranges; Lipton Yellow Label Tea, Knorr and Royco bouillon cubes in the foods unit, etc.
The slump in performance comes on the back of the border closure by the Nigerian government last year. President Muhammadu Buhari in August shut the country’s land borders with both Benin and Niger in a bid to end rampant smuggling activities across the frontiers, which he blamed on the supposed failure of both trade partners to guard their borders properly.
Several businesses across Nigeria and its neighbouring countries have since been affected by the move that has resulted in price increases in basic food items such as rice and frozen foods as well as general consumer goods.
Compounding the rise in inflation and narrowed purchasing power of Nigerians was the 4-week lockdown imposed on Lagos, Ogun, and Abuja in the wake of the coronavirus outbreak, which has further dented consumer confidence and demand for non-essential household products.
Being one of the first major earnings reports for the current financial year published on the Nigerian Stock Exchange, analysts expect a similar pattern in the results of other Nigeria-based businesses as they post their results on the exchange. Though the full effect of the pandemic-induced lockdown will be felt in Q2 2020, the stall in economic activity February and March will likely have an effect on company results.
A subsidiary of Unilever Overseas Holding B.V, Unilever Nigeria is publicly listed with trading and manufacturing interest in the consumer goods market. In 2014, it was listed among the top 20 most valuable companies quoted on the Nigerian Stock Exchange.