Accra, April 3, GNA - Unilever Ghana Limited (UNIL) paid a dividend of 896 cedis per share for the operating year 2005, Mr Ishmael Yamson, Board Chairman announced at the Company's 39th Annual General Meeting held in Accra on Monday.

He told the shareholders that a higher dividend would overburden the company and affect its long term prosperity negatively. The 2005 dividend paid was the same as that of 2004.

Mr Yamson explained that the Company ended 2005 in a cash neutral position and that money for investment in 2006 would have to be generated.

He said 50 billion cedis would be required to invest in brands; 72 billion cedis in capital investments and an additional 12 billion cedis in working capital to fuel sales growth.

All the three major cash outflow requirements must be funded from cash generated from the 2006 operations or borrowed from the banks, the Chairman said and added, "in an environment where price increases are constrained and margins squeezed, we believe that the burden any increased dividend would pose to your business would damage the long term prosperity of your business by preventing us from investing in the named areas."

Unilever, however, achieved a significant turnover of one trillion cedis in 2005 indicating a 16.6 per cent increase over the figure for 2004.

Mr Yamson said of the achievement: "A significant milestone was reached when Unilever achieved a turnover of one trillion in December 2005. Your Company, therefore, joins a club of less than 10 companies in Ghana, which have a turnover exceeding one trillion cedis."

He said even though inflation declined from a peak of 16.7 per cent in March 2005 after the fuel price hikes and declined to 14.8 per cent at the end of December 2005 and interest rates were reduced twice by the Bank of Ghana, real interest rates remained high.

This was associated with continued high borrowing rates that represented an obstacle to private sector growth and the achievement of Government's per capita target of 1,000 dollars by 2010.

Mr Yamson said Unilever's recovery in the face of the competition demonstrated the Company's ability and willingness to compete. He said, however, that even though the nation had been able to achieve economic stability, there was the need for the Government to do more and to learn to draw on the experience of advanced and stronger economies in the face of stiff competition.

For instance, in the United States, political pressure was brought to bear on a Middle Eastern Company to dispose of its USA assets, which it had acquired as part of the acquisition of a multinational. "The French Government recently stepped in to stop an Indian Company from acquiring a French steel company as it was deemed contrary to its national interest while the European Union recently blocked all garment imports from China into Europe because they had exceeded import quotas. "Clearly, even the high priests of free enterprise do not interpret free enterprise as meaning no restrictions," Mr Yamson said, adding: "Liberalisation has brought Ghana advantages but probably more disadvantages. It is imperative that the two are probably balanced in Ghana's favour."

On the other indicators, the Board Chairman said the 2005 results showed that the targets set in 2004 to invest in fewer but stronger brands, reduced cost throughout its businesses to improve operational efficiency, margins and profitability had put Unilever back on the track of growth and profitability.

Profit after tax grew by 23.3 per cent to 99.6 billion cedis for the period under review while profit attributable to members also grew by 46.4 per cent to 91.9 billion cedis.

Cash generated from disposal of surplus assets of 75.3 billion cedis compared with capital expenditure of 46.8 billion cedis to give a net inflow of 28.5 billion cedis from investing activities.

Unilever's home and personal care division recorded a top line growth of 17.3 per cent with the main growth driver categories being Key; Sunlight, Geisha and Lux soaps and Close-Up toothpaste. The Company's laundry; skin cleansing and oral products registered growth in sales of 13 per cent, 26 per cent and 16 per cent in that order.

The food division also posted excellent performance of 28.2 per cent.

The individual brand lines of Frytol Cooking Oil, Blue Band Margarine and Lipton Tea grew by 23.6 per cent; 70.0 per cent and 21.5 per cent, in that order.

On its plantation, Mr Yamson said both the Benso Oil Palm Plantation and the Twifo Oil Palm Plantation increased fresh fruit bunch and palm oil production volumes but low market prices for crude palm oil, which averaged 421 dollars per tonne in 2005 posted depressed margins compared to that of 2004 which averaged 473 dollars per tonne. On the way forward, Mr Yamson said Unilever Ghana's competitiveness would be critical to its success.

"The re-organisation and restructuring undertaken places us on a firm platform to realise our business objectives and we, therefore, look forward to the future with confidence."

The Chief Executive, Mr C. A. Cofie said Unilever continued to actively engage with communities within which it operated. The Company spent 1.3 billion cedis on education, health and the building of entrepreneurial skills in the communities.

Mr J. N. A Hyde, Mr F. A. Manu and Mr Kweku Boateng were elected to serve on the Board of Directors to replace Mr Magnus Boye, Mr Kwame Addae and Mrs Cynthia Ifeagwu, who retired from the Board.