Nigeria’s largest Fast-Moving Consumer Goods (FMCGs) companies have seen their profits rise to a five-year high in the first half of 2021.
Nestle Nigeria, Dangote Sugar, Flour Mills, Unilever Nigeria, and Nascon recorded a combined profit of N52 billion in the first half of 2021, a 22 percent increase compared with N42.6 billion recorded in the same period last year.
While this may easily be construed as a sign of economic recovery, it is also important to note that the average Nigerian has been finding it increasingly difficult to afford these companies' products due to towering inflation.
Prior to the pandemic, the profits of these firms have been dwindling since 2018 but made a rebound in 2021. Coincidentally, Nigeria recorded its highest inflation rate since 2017 as of March this year as food prices surged tremendously, including processed foods from companies that rely heavily on the import of raw materials.
Further analysis of their half-year financials shows that the FMCGs saw revenue surge by 37 percent to N810 billion in H1’2021 compared with N590.9 billion in H1’2020.
Flour Mills recorded the biggest jump in profit among the five companies. Its profit jumped 90 percent to N15.5 billion in H1’2021 compared with N8.1 billion in the same time last year. The firm also recorded a 48 percent growth in revenue to N450 billion in the period.
Unilever bounced back from a loss of N519 million in H1’2020 to a profit of N714.7 billion in H1’2021. Unilever also grew its sales by 43 percent to N39.1 billion from N27.3 billion in the periods under review.
Dangote Sugar also saw its profit grow by 9 percent to N12.6 billion in H1’2021 compared with N11.5 billion in the same time last year. Its revenue surged 28 percent to N132 billion compared with N103.2 billion in the period.
However, Nestle and Nascon recorded a 0.4 percent and 3 percent decline in profits, respectively, during the periods, but their revenue grew 21.6 percent and 21 percent, respectively.
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