Unilever reports N3.07bn profit, proposes N0.10 dividend

Despite severe macro economy challenges that include illiquidity in the foreign exchange market, Unilever Plc has reported a Profit after Tax (PAT) of N3.07 billion in 2016, 157 per cent above N1.19 billion recorded in 2015.
The company, in its results to The Nigerian Stock Exchange (NSE) on Friday, recorded 131.86 per cent in Profit Before Tax (PBT) to N4.1 billion in 2016 from N1.77 billion in 2015.
The increase in profitability was made possible with 17.8 per cent in revenue to N69.8 billion from N59.2 billion in prior year while finance cost dropped by 14 per cent to N2.7 from N3.17 billion in 2015.
The directors recommend to the shareholders the payment of a dividend in respect of the year ended December, 31 2016, of N378,330,000 that is, 10 kobo per share
FBNQuest Research, a Lagos based research firm, said the company’s profit and loss figures showed positives performance.
According to the company, “revenue of N69.8billion grew by 18per cent.PBT and PAT of N4.1billion and N3.1billion advanced by 132 per cent and 158per cent respectively. “Despite a 2016 gross margin contraction of -645 basis points, the positives – strong revenue growth and declines of -11per cent and 41per cent in operating expenses and net interest expense – more than offset this setback.
“The 2016 financial year revenue was broadly in line with consensus’ estimate of N67.9billion. However, PBT and PAT were higher than consensus estimates by 64 per cent and 44per cent respectively.
“Unilever declared a dividend of 10kobo (versus 5kobo in 2015) which implies a yield of 0.3per cent. We forecasted a dividend of 8kobo (versus consensus estimate of 29kobo).
“Last year, foreign exchange sourcing for the importation of raw materials was a major challenge faced by the consumer goods names. However, we believe the impact of this challenge was greater for the smaller competitors.
“As such, the likes of Unilever appear to have gained market share, offsetting the negative impact of foreign exchange importation issues on cogs.
“Year to date, Unilever shares have shed -7.7 per cent and have underperformed the NSE ASI which has shed -5.1per cent. We expect the market to react positively to these numbers. We rate the stock Underperform. Our estimates are under review”, the company explained in its report on Unilever 2016 financial year results.