Unilever stops sale of home care products, posts N1.09bn loss in Q3

Unilever Nigeria Plc has stopped production and sales of its home care brands in Nigeria.

The company disclosed this in its unaudited interim financial statements released on Friday, October 20, for the nine months that ended September 30, 2023,

The decision followed the company’s announcement on March 17, 2023, to exit the home care and skin cleansing category – OMO, Sunlight and Lux brands – in Nigeria.

“The production for home care category ceased in June 2023, and sales ceased in September 2023. The financial reporting is still being assessed and will be fully accounted for by year-end reporting.

“The production and sale for skin cleansing category has been extended to December 2023,” Unilever said.

In April, the company announced the plan of “exiting the home care and skin cleansing categories to concentrate on higher growth opportunities.”

The company reported N1.09 billion profit after tax (PAT) loss in the third quarter (Q3) from N2.25 billion loss reported in Q3 2023.

The negative performance resulted from the company’s borrowing cost, which widened to N1.03 billion in Q3 2023 from N328.89 million in Q3 2022 on the heels of the Central Bank of Nigeria (CBN) exchange rate unification.

The impact of the naira devaluation showed Unilever records a significant jump in revaluation loss of N6.297 billion in the quarter under review from N406.69 million in Q3 2022 and also posted a considerable restructuring cost of N3.27 billion compared to N519.69 million in Q3 2022.

According to Unilever, the revaluation loss arose from foreign currencies-denominated balances regarding trade loans. At the same time, the restructuring cost was raw and packaging materials written off due to the stoppage of production in the home care category and associated redundancy cost.

A further look at the nine-month interim report showed that the company reported a N389.30 million profit before tax (PBT); however, a corporate income tax obligation of N1.48 billion dragged the company’s bottom-line performance into the negative territory.

Inflation, foreign exchange and other macroeconomic challenges are taking a toll on business operating profit and performance.