Unilever Ghana Limited remains positive about its future growth prospects despite the difficult economic climate that negatively impacts the company’s growth and profitability.
The company is hopeful that its very strict stock management and other policies put in place by management would help to improve performance in the future.
Management retains a positive outlook for the company in the coming years, Mr George Owusu-Ansah, Managing Director, Unilever, told journalists after the company held its virtual annual general meeting.
Unilever’s financial results for the year ended December 31, 2019 shows a revenue drop of 47 per cent from GH¢632m in 2018 to GH¢333m in 2019.
The results reflect difficult trading conditions in 2019 as well as a decision to slow down on sales in order to reset the levels of stock in trade. Operating loss for the period was GH¢205m compared with GH¢253m profit in 2018, the managing director said.
Loss after tax was GH¢ 160m in 2019 vs profit of GH¢ 191m. Cash Flow: Cash and cash equivalent improved marginally from deficit of GH¢65m in 2018 to deficit of GH¢ 53m.
Mr Owusu-Ansah explained that the cash situation reflects the reduced sales level for the period
as well as slower cash collections from our key distributors.
To increase sales level he said, the company continued to work with our 33 key distributors and 26 key account partners to deepen the distribution, availability and visibility of brands in relevant stores nationwide.
“In 2019, we expanded our coverage by establishment of 100 sub distributors in the rural and semi-urban areas in Ghana. This added 20,000 stores covered indirectly to our previous directly covered store universe of 62,000. In doing this, we empowered about 100 local entrepreneurs and provided job opportunities for 150 Ghanaian youth, he said.
He said we would strengthen our route-to-market and continue our women empowerment programme this year.”
Mr Owusu-Ansah said the Beauty & Personal Care category of Unilever Ghana maintained its market leadership despite increased competition in the Skin Cleansing and Deodorants sub-categories.
He however, stated that inflationary pressures and the financial sector clean-up had an impact on the purchasing power of most consumers adding that this resulted in consumers switching to cheaper alternatives.
“In response to this, we successfully rolled-out and distributed a new portfolio of affordable GH¢ 1 priced products across our Champion Carbolic, Pepsodent, Geisha and Lifebuoy brands, he said.
Earlier at the meeting the Board Chairman of Unilever, Mr Edward Effah assured shareholders of strategies by management to turn around the fortunes of the company.
He said because of the difficulties that confronted the company during the period under review no dividend would be recommended to shareholders.
Dividend pay-out for 2018 was 0.80 per share.