UAC of Nigeria PLC Sees Major Revenue and Profit Gains in Q2 2024

UAC of Nigeria PLC (“UAC” or the “Group”) has announced ₦5.9 billion profit before tax for the period ended June 30, 2024.

Revenue Surge

The Group reported a revenue of ₦42.7 billion for Q2 2024, marking a 51% increase compared to Q2 2023.

This growth was primarily driven by significant sales increases in the Packaged Food and Beverages segment (+129%), the Edibles and Feed segment (+28%), and the Paints segment (+22%).

Gross Profit and Margin Expansion

UAC’s gross profit surged by 80% to ₦9.6 billion, with the gross margin expanding by 362 basis points to 22.5%.

This improvement was attributed to volume growth in the Packaged Food and Beverages segment, enhanced production efficiency in the Edibles and Feed segment, and strategic price adjustments to mitigate the effects of inflation.

Operating Profit and Efficiency Initiatives

Operating profit for the quarter was reported at ₦3.3 billion, a 390% increase from the previous year. The improved performance is credited to several factors:

• Balancing volume growth with dynamic pricing strategies in the Packaged Food segment to protect margins.
• Enhanced production efficiency in the Edibles and Feed segment.
• Disciplined procurement and supply chain management, particularly in the Edibles and Feed and Packaged Food segments.

Profit Before Tax

Profit before tax rose to ₦5.9 billion, up from ₦4.1 billion in Q2 2023. When adjusted for exceptional items, the underlying profit before tax was ₦3.5 billion, compared to an underlying profit of ₦421 million in the same period last year.

Management Commentary

Group Managing Director, Fola Aiyesimoju, commented on the results: “In the second quarter of 2024, group revenues and operating profit grew by 51% and 390% to ₦43 billion and ₦3.3 billion respectively.

“This performance was achieved against a backdrop of challenging operating conditions including record high inflation impacting input and operating expenses across all our businesses.

“We navigated margin pressure by balancing growing volumes profitably with a disciplined approach to pricing as well as implementing efficiency initiatives across our operating segments. Despite the backdrop, we aim to build on the strong performance recorded thus far. Our focus remains on creating shareholder value by prioritising profitable growth, simplicity, and scale.”

Future Outlook

Despite the challenging economic conditions, UAC of Nigeria PLC is committed to continuing its growth trajectory.

The Group’s focus remains on creating shareholder value through profitable growth, operational simplicity, and achieving scale in its operations.

UAC’s strong Q2 2024 performance underscores the company’s resilience and strategic adaptability in navigating economic headwinds, positioning it for continued success in the future.