Unilever Ghana Sees Q1 Profit Dip Despite 8% Revenue Growth

Unilever Ghana Sees Q1 Profit Dip Despite 8% Revenue Growth

• Company’s net profit falls 29% as input costs outpace sales growth

Unilever Ghana PLC recorded an 8 per cent rise in revenue for the first quarter of 2025, but the gains were dampened by margin pressures and escalating input costs that eroded the company’s profitability. The fast consumer goods manufacturer reported a profit after tax of GH¢17.12 million for the period ended March 31, 2025, down nearly 30 per cent from GH¢24.26 million in the same period last year.

The performance shows a larger pattern affecting fast-moving consumer goods (FMCG) companies in economies with high inflation: even though sales are still growing, profits are getting hurt more and more by fluctuating costs, particularly for important items like palm oil and energy.

Unilever Ghana’s gross profit margin dropped sharply from 44 per cent in Q1 2024 to 36 per cent this year. The deterioration was attributed to elevated raw material and operational input costs, which outweighed modest reductions in administrative and other expenses. Operating profit also slipped by 16 per cent to GH¢29.1 million, translating to a narrower operating margin of 11 per cent compared to 14 per cent in the corresponding quarter last year.

Revenue for the quarter stood at GH¢262.58 million, up from GH¢242.51 million in Q1 2024, suggesting that consumer demand remains steady despite macroeconomic headwinds, including currency depreciation and high inflation. However, the cost of maintaining this growth has significantly increased, highlighting the delicate balance many Ghanaian manufacturers must maintain amidst global supply chain disruptions and domestic fiscal constraints.

Unilever Ghana, a subsidiary of the global Unilever Group, has historically maintained a strong position in Ghana’s consumer goods market, with well-established product lines spanning personal care, food, and home care. But the Q1 results underscore the structural challenges confronting the company’s profitability in the current environment, despite ongoing efforts to manage overheads and streamline operations.

The company’s earnings per share fell to GH¢0.0685 in Q1 2025 from GH¢0.0970 in the same period last year, reinforcing the toll of compressed margins on shareholder returns.

No updates were included in the unaudited results regarding the company’s pricing strategy or forward-looking guidance, but management’s commentary suggests a continued focus on cost optimisation to mitigate ongoing inflationary pressures. The company has maintained compliance with International Financial Reporting Standards (IFRS) and Ghana’s Companies Act, 2019 (Act 992), adopting a historical cost basis for its financial disclosures.

As the FMCG sector adapts to changes in Ghana’s economy—characterized by budget cuts, fluctuating energy prices, and tighter household spending—Unilever Ghana’s success in maintaining sales growth while protecting profits will probably be the main factor in its performance for the full year of 2025.

Financial Highlights – Q1 2025 (vs. Q1 2024)