Consumer goods companies continue their tepid performance in the third quarter on the back of cash-strapped consumers and a faltering economy.
Food maker, Nestle Nigeria plc saw its revenue for third quarter surged 2.35percent to N69.4bn from N67.83bn in Q3 2018, this was however below analysts’ expectations given that the third quarter has been a strong quarter for the company. Profit before tax dropped 0.6percent to N16.11bn and Profit after tax plummeted 9.1percent to N10.59bn dragged by rising production and operational expenses.
Nestlé’s slower quarter-to-quarter revenue growth is linked to the Beverages segment where revenue declined for the first time in three quarters, by 8.1percent quarter-on-quarter but grew 8.3percent when compared year-on-year. This is similar to the corresponding period of the previous year, wherein Beverages revenue declined by 7.1percent quarter-on-quarter, which can be linked to weaker demand in the absence of the Ramadan and Easter festivities, which boosted volumes in Q2.
Unilever Plc’s third-quarter revenue slumped 62.9percent y/y which according to management was linked to tighter credit terms with key distributors in a bid to minimize nonperforming receivables. Sadly, its two segments, food, and Home Personal Care (HPC) businesses lost sizeable market share and were down 56percent and down 70percent respectively.
Flour millers have the land border closure which helped curbed smuggling activities to thank for their improved performance during the third quarter.
Second quarter 2020 result of Flour Mills of Nigeria’s (FMN) for the period ended 30th September, Profit before tax increased slightly by 1percent to N3.1bn. The miller’s food business which accounts for 60-65percent of the group sales plummeted 94percent in Profit before tax to N175m worsened by intense competition and price of wheat in the global market. The impact was however lessened by marked improvements in the sugar business and agro-allied business.
Sugar Refiner, Dangote Sugar saw revenue increased 13.4 percent, while profit after tax declined 6.7percent.
For brewers, performance remained underwhelming amid tight consumer wallets and intense competitions, with players recording a massive growth in net finance cost.
