Unilever Nigeria grows profit by 26% to N7.02bn on strong revenue growth

Unilever Nigeria Plc recorded a 26.4 percent year-on-year increase in profit to N7.02 billion for the first quarter ended March 2026, driven by strong revenue growth and improved operating performance.

According to the Q1 interim financial report, the consumer goods company’s bottom line rose from N5.55 billion in the corresponding period of 2025, translating to earnings per share of N1.22 compared to N0.97 previously.

Revenue grew significantly by 26 percent to N59.17 billion, up from N46.98 billion in Q1 2025, reflecting strong demand across its core segments—Foods, Personal Care, and Beauty & Wellbeing.

Foods remained the dominant contributor with N37.69 billion in sales, accounting for 63.5 percent of the total revenue, followed by Personal Care at N15.84 billion (26.7 percent) and Beauty & Wellbeing at N5.64 billion (9.53 percent).

The Company disclosed that it has 85 key distributors, and one key distributor accounted for more than 5 percent of its revenue

Despite rising inflation during the period, the cost of sales increased at a slower pace of 15.8 percent to N32.56 billion, allowing gross profit to rise 41 percent to N26.61 billion. This indicates improved pricing power and cost management.

Operating profit increased 38.9 percent to N11.48 billion, supported by higher gross margins and modest growth in selling and distribution costs.

However, marketing and administrative expenses surged by nearly 50 percent to N13.58 billion, largely driven by aggressive brand investments and higher overheads.

Data shows that brand and marketing rose to N6.5 billion. Overheads to N5.09 billion and royalties to N1.8 billion

Unilever said, “The company continued to invest in brand and marketing initiatives as part of its strategic focus on strengthening market presence and customer engagement.

“Unilever Nigeria Plc had agreements with Unilever Global IP Limited and Unilever IP Holdings B.V. for technology and trademark licenses, wherein a royalty of 2 percent and 2.25 percent of net sales value for technology and 0.5 percent for trademark was payable by Unilever Nigeria Plc. These agreements executed with Unilever Global IP Limited and Unilever IP Holdings B.V. have been reviewed and approved by NOTAP,” it said.

Despite this, the company maintained strong operating leverage, indicating that revenue growth outpaced cost escalation.

A major driver of profit growth was finance income, which increased to N3.34 billion from N2.66 billion, primarily due to interest earned on deposits.

Net finance income stood at N1.94 billion, although finance costs spiked significantly to N1.40 billion due to foreign exchange losses on bank balances. Profit before tax consequently rose 24.8 percent to N13.42 billion.

Unilever Nigeria’s balance sheet remained robust, with total assets increasing to N189.99 billion from N155 billion in the same period of last year.

Cash and cash equivalents stood at a strong N114.46 billion, highlighting significant liquidity and treasury strength.

Trade receivables rose sharply to N13.15 billion, reflecting increased sales activity, while advance payments and import deposits also grew, suggesting forward inventory positioning amid supply chain pressures.

Total equity improved to N114.48 billion, supported by retained earnings growth, underscoring the company’s ability to internally fund expansion.

Despite strong profitability, operating cash flow dropped sharply to N818.6 million from N9.57 billion in the prior year.

This decline was primarily driven by significant working capital outflows, including increases in receivables (N2.68 billion) and prepayments (N3.67 billion), as well as a reduction in payables.

Investing activities remained positive at N2.88 billion, supported by interest income, while financing cash flows were minimal.

Net cash increased by N3.68 billion during the period, reinforcing the company’s strong liquidity buffer.

Unilever began the year with a share price of N72.00 and has since gained 52.8 percent on that price valuation, ranking it 42nd on the NGX in terms of year-to-date performance.

The company’s stock as of Wednesday is currently traded at N110.00, making it the 29th most valuable stock on the NGX with a market capitalisation of N632 billion.