UAC of Nigeria PLC has announced its audited results for the year ended 31 December 2022, with its gross profit dropping 19 percent to ₦14.2 billion as against ₦17.5 billion in the corresponding period of 2021. The gross profit margin contracted by 427 basis points to 13 percent.
In a corporate filing with the Nigerian Exchange Limited (NGX), the company attributed the margin contraction largely to the rising raw material costs across all businesses.
Loss before tax was ₦4.36 billion, compared to the ₦4.10 billion profit before tax recorded in 2021. Loss after tax from continuing operations was ₦4 billion in 2022, compared to a profit after tax of ₦2.6 billion in 2021. Total loss for the year was ₦4 billion.
The revenue for the period under review stood at ₦109.2 billion, an increase of 7.8 percent from ₦101.3 billion in 2021. The increase in revenue was largely driven by sales growth in the animal feeds and other edibles, paints and quick service restaurants segments.
Commenting on the results, Group Managing Director, Fola Aiyesimoju, stated: “Our profitability was negatively impacted by losses in our animal feeds segment, which more than offset contributions from other segments. Our businesses grappled with escalating costs particularly energy, distribution, and finance costs which negatively impacted performance. Tighter working capital management resulted in N9.6bn free cash flow across the UAC Group. We will execute growth initiatives with caution until macroeconomic conditions improve.”
The company highlighted some of its strategic initiatives:
- Completed groupwide ERP implementation to SAP S/4 Hana (a ₦2.5bn investment) focused on enhancing controls.
- ₦2.8bn invested to increase SWAN spring water capacity 3x.
- Invested ₦1.2bn expanding the Mr Bigg’s and Debonairs Pizza restaurant network.
It also noted that the following transactions were responsible for key differences when comparing performance in 2022 and 2021:
- In September 2021, UAC acquired Tiger Brands Limited’s minority shareholding (49%) in UAC Foods Limited (UFL) fora cash consideration of N3.92bn. Consequently, UFL is now a wholly owned subsidiary of UAC and the total profitattributable to equity holders of UFL in 2022 was recognised by UAC versus 2021 where 51% of UFL’s profit wasrecognised for 8 months and 100% of its profit was recognised for 4 months.
- In June 2022, UAC increased its stake in Chemical and Allied Products PLC (CAP) by 1.31% to 57.85%.
- UAC’s issued share capital increased by 44,835,076 ordinary shares to 2,926,131,656 as a result of the scrip dividend shares that were issued in August 2022.
