UAC Nigeria Plc recorded a pre-tax profit of N12.7 billion in 2023, marking a bounce back to profit-making ways after the group recorded a pre-tax loss of N4.4 billion in 2022.
According to UAC’s financial results for 2023, the group recorded a revenue of N118.7 billion, which reflects a 9% growth from the N109.3 billion posted in 2022.
The group’s revenue growth was driven by increased sales across its various operating segments, including Paints (+24%), Packaged Food and Beverages (+23%), Quick Service Restaurants (+21%), and Animal Feeds and Other Edibles (+2%).
With a gross profit of N21.8 billion, the group posted a gross profit margin of 18.4% marking a 5.36-percentage points increase from the 13.0% recorded in FY 2022. Also, the group recorded an operating profit of N9.1 billion in FY 2023, compared to the operating loss of N2.4 billion posted in FY 2022.
According to the group’s earnings press release, UAC’s impressive performance in 2023 is tied to: increased revenue from sales growth and price increases, cost-saving measures introduced in its Animal Feeds and Other Edibles segment, and profit generated from the sale of non-core property assets.
Key Highlights FY 2023 (FY 2022, % Change)
- Revenue: N118.7 billion (N109.3 billion, +9%)
- Gross profit: N21.8 billion (N14.2 billion, +53%)
- Gross profit margin: 18.4% (13.0%, +536 bps)
- Selling and distribution expenses: N8.8 billion (N8.5 billion, +3.2%)
- Operating profit: N9.1 billion (-N2.4 billion, +483%)
- Operating profit margin: 7.7% (-2.2%, 987 bps)
- Net finance (cost)/income: N2.7 billion (-N2.1 billion, +228%)
- Profit before tax: N12.7 billion (-N4.4 billion, +390%)
- Profit before tax margin (%): 10.7% (-4.0%, +1466 bps)
- Profit for the period: N7.8 billion (-N4.0 billion, +295%)
- Profit margin: 6.6% (-3.7%, +1023 bps)
- Basic earnings per share: N2.76 (-N1.07, +358%)
- Annualised return on equity: 16.7% (-7.3%, +2353 bps)
Fola Aiyesimjou, the Group Managing Director of UAC Nigeria Plc, speaking about the group’s performance in 2023, noted that the group’s objective in 2023 was to reverse the trend of losses in the group’s Animal Feeds Business as well as drive growth in the Packaged Foods business.
He noted, “On our earnings call for the 2022 financial year, we stated that our biggest objective was to reverse the performance trend of the Animal Feeds business and to address the challenges that negatively impacted performance of our Packaged Food and Beverages business. We are pleased to have successfully executed on this which, together with sound risk management practices, drove performance in 2023.”
In line with Aiyesimoju’s call, the group’s Animal Feeds and Other Edibles businesses, Grand Cereals Limited and Livestock Feeds Plc, posted a 1.5% revenue growth in 2023 to N66.9 billion from N65.9 billion posted in FY 2022. The segment then saw a significant 64% increase in pre-tax earnings, resulting in a loss before tax of N2.5 billion, compared to the N6.9 billion loss before tax reported in 2022.
The group’s Packaged Foods and Beverages business segment posted a revenue of N28.7 billion in 2023, representing a growth of 23.1% from the N23.3 billion posted in 2022.
The segment which features UAC Foods Limited (producers of Gala sausage roll, Supreme Ice cream, and Swan Table Water, Funtime Snacks) recorded a profit before tax of N2.7 billion in 2023, a significant uptick from N144 million loss before tax recorded in 2022.
