Unilever Ghana Limited says its 2011 after-tax earnings jumped by 56 percent to GH¢35.6million, but worries that the weak cedi is raising its production costs in 2012.

The company is a manufacturer of leading brands in foods, home and personal care products,  and imports some of its raw materials — which exposes it to exchange-rate fluctuations. The cedi has depreciated by some 12 percent against the US dollar so far this year.

“It increases the cost of raw materials and production,” said David Mureithi, Managing Director of the company, at its annual general meeting in Accra.

Board Chairman Dr. Ishmael Yamson said, however, he is optimistic measures taken by the Bank of Ghana to arrest the fall of the cedi will eventually stabilise the national currency.

“This year appears to be a challenging one for business, following the removal of the fuel-subsidy and the pressure on government’s wage bill. However, the prospects for our business are bright as we will focus on strategies to create more value for our shareholders and partners,” he said.

The company recorded a 33 percent increase in its turnover, from GH¢181million in 2010 to GH¢241million.  Operating profit for the period rose to GH¢44.4million from GH¢23.9million in 2010, an increase of over 85 percent.

The growth was driven by the introduction of new brands and products such as Fanico, BF, Lifebuoy and Sunlight Powder onto the Ghanaian market, and the introduction of new variants for its heritage brands Geisha, Gemiguard and Lifebuoy.

“The achievement in operating profit was driven by selling higher volumes and further factory investments to increase efficiencies and savings in our operations.  The operating margin improved from 13.2 percent in 2010 to 18.4 percent in 2011,” Mr. Mureithi said.  

The company also realised GH¢4.3million from the sale of Benso Oil Palm Plantation in the first quarter of 2011.
“The rationale was to enable management concentrate on the fast-moving consumer goods business where we have the expertise to compete effectively,” he said.

The board declared a dividend of GH¢0.48 per share, representing a 67% increase in the payout for 2010.

By Dominick Andoh

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