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16.04.2007 General News

Unilever defreezes frozen dividends

By myjoyonline

Unilever Ghana Limited has for the first time since 2003 increased its dividend to shareholders, to 1,050 cedis per share.

This is 17.2 percent over the last dividend of 896 cedis paid. The total payout of this dividend is about 65.6 billion cedis.
These figures were announced at the company's 40th annual general meeting (AGM) held in Accra.

The company had frozen shareholders' dividends at 896 cedis per share since 2003. This was to allow the directors to conserve cash for investment and to support a major realignment of the business to market-operating realities.

The Chairman of the Board of Directors, Ishmael Yamson, however noted that the company's recovery was not complete, but recognised that the shareholders deserved a fair return on investment.

The company achieved sales of about 1.2 trillion cedis, up by 14.7 percent, reflecting a real underlying volume growth of 10.7 percent.
The Chief Executive Officer of the company, Charles Cofie, indicated that this performance was commendable, particularly viewed in the context of the dynamics of a market already characterised by price cutting, particularly from imports.

The company's export business continued to make a significant contribution to the business and represent 10.5 percent of the company's total turnover.

Both the company's Home and Personal Care Division (HPC) and Foods categories continued to demonstrate good growth potential.

Turnover for the HPC category recorded an underlying sales growth of 16.8 percent, mostly coming through a volume increase of 12.1 percent, with 4.2 percent being attributed to price.

In the company's Oral category the Close-up and Pepsodent brands were the major performers, achieving sales growth of 32.8 percent.

The Foods division also achieved growth - of 11 percent driven mainly by real volume growth. In spite of adverse market conditions, good growth rates were achieved for all product groups in the category. Cooking oils, tea and culinary achieved real underlying growth rates of 16.6 percent, 35.6 percent, and 11.7 percent respectively.

Strong growth in operating profits mainly account for the growth of 23.2 percent in profit before tax. Profit after tax, at 97.9 billion cedis, marginally declined against the 99.6 cedis billion of 2005.

Despite this marginal decline, the directors believe that this represents a good performance and shows that the core business is capable of compensating quickly for the loss of profits from disposals, which had represented a significant proportion of the business's profits in the last few years.

According to management of the company, efforts will be intensified to fully realise goals by accelerating growth, improving the product-mix portfolio, and continuing to cut unproductive costs out of the business with the ultimate objective of improving returns to shareholders.

Credit: BusinessWeek