Companies within the fast moving consumer goods sector have recorded decline in profits as economic pressures continue to grow. Unilever Nigeria, Nigerian Breweries and other companies appear to cringe under the weight of the economic pressures experienced within the first half of the year.
This is occasioned by persistent fall in consumer disposal income while purchase preferences shift to accommodate the rising prices in petrol and a consequent rise in the price of transportation and energy requirement.
The positive trend which characterised the Nigerian economy in the last decade took a downward turn with the slump of global oil prices in 2014. This trend continued into the first and second quarters of 2015, and was further escalated in second quarter by a lull in the retail market in March and April.
While the country’s general economic outlook within this period grossly affected the financial status of several businesses, many predict that the economy will settle in the last quarter of this year as the new administration settles down and the country has a clearer direction on government policies.
Unilever Nigeria Plc records profit decline in its half year, 2015 financial statement accounts. While overall results declined, the business improved performance in overheads with a decline of 4 per cent from the last quarter, and interest cover declined from a coverage of 4 half year 2014 to 1 half year, 2015.
Unilever Nigeria was not the only company worst hit, Transnational Corporations half year results showed a 35.6 per cent decline in pre-tax profits and a drop in revenue from N21.21 billion to N20.25 billion, same period from last year.
The financial sector is also not left out as many release their results. Majority of the banks have cited the slump in oil prices and bad loans as the main reasons for the poor performance in half year, 2015.
Stanbic IBTC Holdings Plc reported a two-digit decline in its profits, posting a pre-tax profit of N9.537 billion in the first half results of 52 per cent, down from N19.94 billion same period 2014. Post tax profit is 40 per cent lower than same period last year, down to N9.695 billion from N16.184 billion.