Unilever Nigeria Plc reported an 18% increase in profit after tax to N132 billion for the first half of 2026, up from N112 billion in the same period last year. However, the earnings growth was largely driven by other income and cash-related gains, while the company's core operating profit declined by 12% due to escalating costs.
Key Financial Highlights
The company's revenue grew by 15% to N420 billion, buoyed by robust demand for its home and personal care products. Despite this top-line growth, cost of sales surged by 22% to N280 billion, squeezing gross profit margins. Consequently, operating profit dropped to N95 billion from N108 billion in H1 2025.
Net finance income, which includes interest earned on cash balances, contributed significantly to the bottom line, totaling N40 billion. This offset the operational decline, leading to the overall profit improvement. According to the company's financial statements, other income also rose by 30% to N25 billion, primarily from disposal of assets.
Cost Pressures and Strategic Response
The company attributed the cost increases to raw material inflation and currency devaluation effects. In a statement, the Managing Director, Tim Kleinebenne, said, "We are navigating a challenging operating environment with resilience. Our focus remains on cost optimization and premiumization of our portfolio to sustain profitability."
Unilever Nigeria has implemented price increases across select product lines and enhanced its supply chain efficiency to mitigate margin erosion. The company also invested N15 billion in capacity expansion during the period, targeting increased production of its popular brands like Omo and Lux.
Market Reaction and Outlook
Following the results, shares of Unilever Nigeria rose by 3.5% on the Nigerian Exchange, reflecting investor confidence in the company's cash generation ability. However, analysts caution that sustained profitability hinges on managing input costs and foreign exchange exposure.
Looking ahead, the company expects consumer demand to remain strong in the second half, but warns of potential headwinds from rising energy costs and logistics expenses. Unilever Nigeria reaffirmed its commitment to delivering long-term shareholder value through disciplined capital allocation and innovative product launches.
