Companies within the Fast Moving Consumer Goods sector have recorded a decline in profits as economic pressures continue to grow.
Unilever Nigeria, Nigerian Breweries and other companies appear to be hit by the economic pressures experienced within the first half of the year.
This is occasioned by persistent fall in consumer disposable income while purchase preferences shift to accommodate the rising prices in petrol and a consequent rise in the price of transportation and energy.
The positive trend which characterized 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 quarter of 2015 and was further escalated in Q2 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 may rebound 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 recorded 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 percent 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 hit as Nigerian breweries half-year pre-tax profit declined to 8.5 percent same period from last year to N30.39 billion, while total revenues grew by 7.2 percent to N151.61 billion.
Transnational Corporations half year results showed a 35.6 percent decline in pre-tax profits and a drop in revenue from N21.21 billion to N20.25 billion in the 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 half year 2015.
Stanbic IBTC Holdings Plc reported a two digit decline in its profits, posting pre-tax profit of N9.537billion in the first half results – 52 percent down from N19.94 billion in the 2014 period.
