Unilever Nigeria Plc released its unaudited nine months (9M) results for the period ended September 30, 2017 with solid earnings growth and profit before taxation (PAT).
The results at the Nigerian Stock Exchange (NSE) show revenue of N69.128billion from N49.871billion in the corresponding period of 2016, an increase of 38.61percent.
Gross profit rose by 45.79percent to N21.432billion from N14.700billion. Operating profit increased by 194.84percent to N9.175billion from N3.112billion.
Profit Before Taxation (PBT) increased by 351.57percent to N6.823billion from N1.511billion; while Profit After Tax increased to N4.82billion from N1.56billion, up by 207.98percent.
Shareholders’ Fund stood high at N16.138billion from N9.381billion, up by N72.03billion in the review month.
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“Unilever shares have gained 38percent and are tracking in line with the broad index which is up 36percent this year. We expect the market’s reaction to these numbers to be neutral to slightly positive,” said FBN Quest research analysts. They rate the stock ‘neutral’, though their estimates are under review.
Vetiva Capital analysts said their FY’17 dividend per share estimate for Unilever remained unchanged at 30kobo (2016: 10kobo). Consequently, they revise their Target Price (TP) to N26.10, SELL (Previous: N25.01). “Major downside risk to this valuation would be a much lower boost from the seasonally stronger festive season in fourth-quarter (Q4), whilst upside would be a tighter control of operating expenses”, Vetiva said.
At current price of N44, Capital Bancorp Plc analysts recommend entry price of N39 and a target price of N46.99. Also, the analysts urged investors to hold the stock of Unilever Nigeria Plc.
“Given that the company recently concluded a rights issue of which the proceeds have been projected to be used in liquidating intercompany loans which are dollar denominated as well as used to support other working capital needs, we expect to see significant improvement in other income, a reduction in finance cost and a gradual elimination of foreign exchange loss on financing. Going forward, we have revised our target price slightly higher to N46.99 with a HOLD recommendation on the company shares.”
