UAC of Nigeria PLC Reports Remarkable Turnaround with ₦4.1bn Profit in Q2 2023

UAC of Nigeria PLC, a leading diversified conglomerate, revenue grew by 6% to ₦28.3 billion as all operating segments experienced growth in the second quarter of the year.

The Paints segment led growth with a 38% surge in gross profit to ₦5.3 billion. This represents a 306 basis point expansion in the gross margin or 18.9% growth.

Operating profit stood at ₦665 million as the Group efficiently navigated rising input and operating costs, including electricity, power, and distribution expenses.

Profit before tax stood at ₦4.1 billion in the period under review, up from the ₦966 million loss incurred during the same period in 2022. This outstanding profitability was attributed in part to a mark-to-market gain of ₦3.6 billion on UAC’s treasury portfolio.

Earnings per share rose substantially to 82 kobo, signaling a drastic turnaround from the negative 36 kobo reported in Q2 2022.

Commenting on the results, Group Managing Director, Fola Aiyesimoju, stated: “Operating conditions in the first half of the year were very challenging. In the first quarter, our businesses were impacted by cash shortages relating to the currency redesign program, as well as, lost trading days on account of elections.

“Towards the end of the second quarter, we grappled with rising levels of inflation driven by foreign currency exchange rates and the price of petrol. We tried to balance protecting our margins with delivering growth, and recorded modest success in the second quarter. We expect challenging macroeconomic conditions to continue over the course of the second half of the year and will focus on steering our businesses through these challenges.

“We anticipate margin pressure on account of the lag between rising input costs and passing these on to the already stressed consumer via price increases. We will implement initiatives to alleviate the challenges faced by our employees, and continue to seek operating efficiencies to manage rising costs.”