Inside Unilever Nigeria’s 6 Biggest Challenges in 2025

Unilever Nigeria Plc is grappling with at least six major issues that are shaping its financial stability and business strategy, according to its latest financial disclosures.

The challenges include rising costs, currency risks, restructuring efforts, and market concentration, as shown in the company’s unaudited results for the year ended December 31, 2025.

It revealed that Unilever Nigeria more than doubled its profit to ₦30.7 billion from ₦15.1 billion in 2024, helping the company cut debt despite inflation, currency volatility, and restructuring pressures.

Revenue rose 43.6 per cent to ₦214.7 billion from ₦149.5 billion, while operating profit climbed to ₦42.7 billion.

Strong cash flow allowed Unilever to fully repay ₦3.2 billion in trade finance loans used during earlier foreign exchange shortages.

However, currency risks remain, with a ₦710 million exchange loss recorded as the company also impaired a ₦468.1 million sustainability loan and declared a ₦10.1 billion dividend.

Six key risks that shaped Unilever’s performance

First, the company is under pressure from sharply higher operating costs. Marketing and administrative expenses increased to ₦42.4 billion in 2025 from ₦29.6 billion the previous year, primarily due to inflation and higher spending on staff and brand support.

Second, foreign exchange volatility remains a key risk. Although Unilever Nigeria repaid its trade finance facilities in 2025, the company still recorded a ₦710.4 million exchange loss on its bank balances, reflecting continued exposure to movements in major foreign currencies.

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Third, the company is undergoing a structural shift after exiting the home care and skin cleansing segments. This has led to the repurposing of assets, with former factory buildings now leased out as investment properties, while related plant and machinery have been moved into finance lease arrangements.

Fourth, credit risk remains an issue despite improved recovery of trade receivables. A sustainability-related loan to Wecyclers Nigeria Ltd was impaired by ₦468.1 million, while impairment trends were also influenced by provisions on intercompany receivables, pointing to uncertainty around related-party credit exposure.

Fifth, Unilever Nigeria is still navigating regulatory challenges tied to intellectual property. Although IP rights were transferred to global entities in 2023, approval for the Trademark Licence agreement is still pending with the National Office for Technology Acquisition and Promotion (NOTAP).

Finally, the company’s operations remain heavily concentrated in Nigeria, where 97 per cent of revenue is generated. In addition, reliance on a small number of distributors increases exposure to domestic economic shocks and potential supply chain disruptions.

Together, these issues highlight the balancing act Unilever Nigeria faces as it seeks to protect earnings, manage risks, and stabilise operations in 2026.

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