Unilever Nigeria – Earnings slide expected despite Revenue rebound

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Despite its earlier woes over the past year, Unilever Nigeria managed to post a decent recovery in the first half of the year – +51% y/y growth in topline – although revenue remains depressed compared to its 3-year historical trend.

We expect Revenue for Q3 to come in at ₦14.5 billion, a 62% step up from the previous year, buoyed by the company’s HPC segment as well as a recovery in seasoning cube volumes. We estimate that operating margins will remain depressed at 62%, as we expect continued impairments on existing Receivables.

Unilever Nigeria - Earnings slide expected despite Revenue rebound Unilever Nigeria - Earnings slide expected despite Revenue rebound - Brand Spur

Although we expect Q3 PAT to come in at ₦0.4 billion, we estimate a 9M’20 loss after tax of ₦0.1 billion given that the company had recognized loss after tax of ₦0.5 billion in H1’20.

Unilever Nigeria - Earnings slide expected despite Revenue rebound Brandspurng1
Source: Company Fillings, Vetiva Research

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