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UAC Posts N12.7 Billion Profit Before Tax in 2023

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UAC Nigeria

UAC of Nigeria PLC reported a 9% increase in revenue to N119 billion in the 2023 financial year as key segments recorded solid growth in the year ended 31 December 2023.

FY 2023 Highlights

• ₦119bn revenue, 9% higher than 2022, driven by sales growth across all operating segments: Paints (+24%), Packaged Food and Beverages (+23%), Quick Service Restaurants (+21%), and Animal Feeds and Other Edibles (+2%).
• ₦21.8bn gross profit, 53% higher. Gross margin expanded 536 bps to 18.4% due to price increases implemented to mitigate the impact of inflation, volume growth in the Packaged Food and Beverages and Paints segments, as well as improvements in production efficiency in the Animal Feeds segment.
• ₦9.1bn operating profit compared to operating loss of ₦2.4bn in 2022. Improved performance in 2023 due to:
– Higher revenue across all segments driven by a mix of volume growth and price increases.
– Cost saving initiatives implemented at our Animal Feeds and Other Edibles segment.
– Gain from disposal of non-core property assets.
• Profit before tax of ₦12.7bn. Underlying profit before tax, adjusted for exceptional items, of ₦1.7bn compared to loss before tax of ₦4.4bn recorded in 2022.
• Earnings per share of 276 kobo (2022: -107 kobo).
• ₦25.3bn cash and cash equivalents, 57% higher than ₦16.2bn in 2022.

Commenting on the results, Group Managing Director, Fola Aiyesimoju, stated: “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. Our Packaged Food and Beverages business grew profitability by N2.9bn from a loss of N144mn in 2022 to a profit of N2.7bn in 2023.

“Initiatives to drive Animal Feeds performance bore fruit in the fourth quarter and the business recorded N3.8bn in incremental profit, from a loss of N3.5bn in Q4 2022 to a profit of N259mn in Q4 2023. Our focus in 2024 will be on sustaining and improving performance across our businesses.”

Group Performance and Financial Review: FY 2023

Revenue in 2023 increased 9% year on year (“YoY”) to ₦119 billion supported by revenue growth in all segments. Paints segment (+24.2% YoY) on account of price increases and positive impact of growth strategy on volumes; Packaged Food and Beverages segment (+23.1% YoY) due to volume growth in snacks and spring water categories, as well as price reviews across board; Quick Service Restaurants segment (+20.8% YoY) driven by increase in company-owned restaurants (corporate stores), and Animal Feeds segment (+1.5% YoY) driven by price increases to offset rising raw material costs.

Gross profit in 2023 increased by 53% YoY to ₦21.8 billion and gross profit margin expanded by 536 basis points to 18.4%. Margin improvement was largely on account of topline growth in all segment and production efficiency in the Animal Feeds and other Edibles segment.

Operating Profit was ₦9.1 billion in 2023 (2022: operating loss of ₦2.4 billion). The improvement in profitability is attributable to gross profit expansion and gain from sale of non-core property assets. Underlying operating profit, adjusted for gain from property sale and non-recurring impairment charge, was ₦2.6bn. Operating profit margin expanded 987 bps to 7.7%. Operating expenses as a percentage of sales increased 110 bps YoY to 16.9%.

Operating expense of ₦20bn was 16.1% higher compared to 2022 reflecting the impact of inflation on operating cost as well the effect of Naira depreciation on expenses pegged to foreign currency.

The Group recorded a Net finance income of ₦2.7 billion in 2023 compared to the Net finance cost of ₦2.1 billion recorded in 2022. Finance income was positively impacted by higher cash from disposal of non-core assets as well as gains in the treasury portfolio recorded during the year.

Share of profit from associate companies was ₦860million, compared to ₦103 million in 2022 driven expansion of MDS’ transport business. Profit before tax was ₦12.7 billion, compared to the loss before tax of ₦4.4 billion recorded in FY 2021. Underlying PBT, adjusted for exceptional items was ₦1.7bn. Total profit for the period was ₦7.8 billion in 2023 impacted by tax expense of ₦4.9 billion, compared to Loss after tax of ₦4 billion in 2022.

Earnings per share was 276 kobo in 2023 compared to 107 Kobo loss per share recorded in 2022.

Free Cash Flow for the period was ₦4.9 billion in 2023 compared with ₦9.6 billion in 2022, due to increased inventory and receivables in 2023. Return on Equity from continuing operations at for 2023 was 16.2%, compared to a negative 7.3% in 2022. Return on Invested Capital (ROIC) was 2,517 bps at a 20.3% (2022: negative 4.9%).

Group Performance and Financial Review: Q4 2023

Revenue in Q4 2023 increased by 18% YoY to ₦37.2 billion from ₦31.5bn in Q4 2022. All operating segments recorded revenue growth: Packaged Food and Beverages (+79%), Paints (+40%), Animal Feeds (+2.4%), and QSR (+0.7%).

Gross profit of ₦7.7 billion was 300% higher compared to ₦1.9 billion in Q4 2022. Gross profit margin of 20.7% (+ 1,458 bps improvement) reflects the net impact of the price increases implemented in prior quarters to mitigate the impact of inflation, impact of growth strategy on volumes as well as conversion cost-saving initiatives in the Animal Feeds segment.

Operating profit of ₦2 billion in Q4 2023 compared to ₦3.1 billion operating loss recorded in Q4 2022.

Operating expenses increased by 27.7% YoY to ₦5.9 billion from ₦4.6 billion in Q4 2022, reflective of broader inflationary pressures.

As a result, opex/sales ratio increased 120bps YoY from 14.7% in Q4 2022 to 15.9% in Q4 2023.

The Group recorded a Net finance income of ₦794 million in Q4 2023 compared to the Net finance cost of ₦269 million recorded in Q4 2022. Share of profit from associate companies increased to ₦235 million from ₦142 million reported in Q4 2022 reflecting the improved performance at MDS Logistics Limited.

Profit before tax of ₦3.1 billion (Q4 2022 Loss before tax: ₦3.3 billion). Excluding exceptional items profit before tax was ₦2 billion. Total profit for the quarter was ₦1.1 billion compared to ₦2 billion loss after tax in Q4 2022. EPS was 30 Kobo in Q4 2023 (Q4 2022: LPS 60 Kobo).

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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MicroStrategy Rally Crushes Short Sellers, Wiping Out $1.92 Billion

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MicroStrategy- Investors King

Short sellers betting against MicroStrategy found themselves facing significant losses as the company’s rally wiped out $1.92 billion since March.

This development comes amidst a rally that has seen MicroStrategy’s stock outperform bitcoin, causing a considerable hit to those who had taken a bearish stance on the tech firm.

According to data from S3 Partners, short sellers have been on the losing end since March, as MicroStrategy’s stock surged, highlighting the impact of the rally on those betting against the company’s success.

This loss underscores the challenges faced by short sellers in a market where certain stocks experience rapid and unexpected price increases.

The rally in MicroStrategy’s stock is attributed to several factors, including the approval of several spot bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) earlier in the year.

This move by the SEC brought bitcoin, a once-nascent asset class, closer to the mainstream and fueled investor interest in companies like MicroStrategy, known for their significant holdings of the cryptocurrency.

MicroStrategy, which held nearly 190,000 bitcoin on its balance sheet as of the end of 2023, has indicated its intention to continue increasing its exposure to the digital currency.

The company’s decision to sell convertible debt to raise money for additional bitcoin purchases further bolstered investor confidence and contributed to the stock’s rally.

Analysts at BTIG noted that the premium for MicroStrategy’s stock reflects investors’ desire to gain exposure to bitcoin indirectly, especially those who may not have the means to invest directly in the cryptocurrency or ETFs.

The company’s ability to raise capital for bitcoin purchases is seen as a positive sign for shareholders, adding to the optimism surrounding its stock.

However, despite the recent rally and optimism surrounding MicroStrategy, the crypto industry as a whole continues to be heavily shorted.

Short interest in nine of the most-watched companies in the crypto space remains high, standing at 16.73% of the total number of outstanding shares, more than three times the average in the United States.

Moreover, concerns persist regarding the SEC’s stance on cryptocurrencies, with some experts suggesting that the approval of spot bitcoin ETFs may not necessarily indicate a broader acceptance of other similar products, such as spot ethereum ETFs.

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Geregu Power Plc Announces N14.46bn Profit in Q1 2024

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Geregu Power Plc

Geregu Power Plc has announced a profit of N14.46 billion for the first quarter (Q1) of 2024.

This represents a 307% increase when compared to the same period last year.

The power-generating company, known for its pivotal role in Nigeria’s energy sector, disclosed its outstanding financial results in its interim financial statement filed with the Nigerian Exchange Limited on Tuesday.

This disclosure comes shortly after the firm’s Deputy Chief Executive, Julius Omodayo-Owotuga, hinted at the promising financial outlook during the company’s recent annual general meeting held in Lagos.

According to the interim report, Geregu Power Plc’s revenue surged to N50.42 billion in the first quarter of 2024, representing an increase of 254.37% year-on-year appreciation.

The company’s net finance income transitioned from a negative position to N133.61 million. This positive momentum was supported by a moderation in finance costs, which decreased from N3.141 billion to N2.29 billion as of March 2024.

Speaking to stakeholders at the recent annual general meeting, Femi Otedola, Chairman of Geregu Power, expressed satisfaction with the company’s exceptional financial performance in 2023.

Otedola highlighted the board’s decision to propose a dividend distribution of N8 per share for the 2023 financial year as a testament to their commitment to rewarding shareholders and confidence in the company’s future prospects.

The robust financial results for the first quarter of 2024 further solidify Geregu Power’s position as a leading player in Nigeria’s energy landscape.

The company’s commitment to operational excellence, strategic investments, and adherence to international standards, such as obtaining ISO 9001 and 14001 certifications from the Standard Organisation of Nigeria, underscores its dedication to driving sustainable growth and value creation.

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Guaranty Trust Holding Company Plc Records N609.3bn Profit Before Tax in 2023

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GTCO Commemorates Listing on Nigerian Exchange - Investors King

Guaranty Trust Holding Company Plc (GTCO) has announced a strong profit before tax (PBT) of N609.3 billion for the 2023 financial year.

This represents an increase of 184.5 percent when compared to the previous year.

The audited consolidated and separate financial statements filed with the Nigerian Exchange Group and London Stock Exchange on Monday revealed market capitalization exceeded N1 trillion on the NGX to further solidify GTCO’s position as one of the top financial holding companies in Nigeria.

During the period under review, the group’s post-tax profit rose by 218.99 percent to N539.65 billion from N169.17 billion in 2022.

Key indicators such as loans and advances increased by 31.5 percent to N2.48 trillion, while deposits grew by 63.7 percent to N7.55 trillion.

The group’s total assets and shareholders’ funds closed at N9.7 trillion and N1.5 trillion, respectively.

Despite the challenging economic environment, GTCO maintained a strong capital adequacy ratio of 21.9 percent.

Also, the group sustained asset quality, with IFRS 9 Stage 3 loans improving to 4.2 percent in December 2023 from 5.2 percent in the same period of the prior year.

However, the cost of risk experienced an uptick, rising to 4.5 percent from 0.6 percent in December 2022, largely due to worsening macroeconomic factors.

Despite these challenges, GTCO’s pre-tax return on equity stood at 50.6 percent, while pre-tax return on assets was 7.6 percent. The cost-to-income ratio remained favorable at 29.1 percent.

Commenting on the financial results, Mr. Segun Agbaje, the Group Chief Executive Officer of GTCO, expressed satisfaction with the company’s performance amidst a challenging operating environment.

He attributed the strong performance to the successful implementation of the group’s business model across banking and non-banking business verticals.

“Also important to our success is our relentless obsession with innovation and offering great customer experiences as demonstrated by the successful redesign and upgrade of our mobile banking application, GTWorld,” he stated.

“In a landscape characterised by evolving regulatory reforms, global uncertainties, and heightened competition, we have continued to leverage our inherent strengths and capabilities to unlock significant value, creating more opportunities for the businesses and individuals we serve.

In line with its commitment to shareholders, GTCO announced a final dividend of N2.70k, bringing the total dividend for 2023 to N3.20k.

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