9months results: UAC of Nigeria reports 30.7% increase in profit

UAC of Nigeria Plc has announced its unaudited results for the nine months ended September 30, 2019 with profit before tax gaining 30.7 per cent to N6.55 billion compared to N5.01billion reported prior nine months ended September 30, 2018.

With the payment of N1.85 billion tax in nine months, UAC of Nigeria profit after tax from continuing operations  rose by 30.2 per cent to N4.7 billion from N3.61billion reported in nine months of 2018.

However, the group reported a loss of N12.76 billion in nine months ended September 30, 2019 from a loss of N994million reported in nine months ended September 30, 2018.

In terms of revenue, the group reported 12.6 per cent increase to N60.5billion compared to N53.77billion generated in nine months of 2018 while gross profit hits N12.22 billion in nine months of 2019, 16.1 per cent increase over N10.53 billion generated in nine months of 2018.

The company in a statement to NSE explained that revenue increase was driven by improved performance in the Animal Feeds & Other Edibles segment grew by19.6per cent year-on-year (YoY) following continued recovery of market share for poultry and fish feeds, and increased demand for concentrates.

“Revenue growth in Packaged Food & Beverages (+six per cent), Paints (+4.1per cent) and Quick Service Restaurants (+18.8per cent) also contributed to the YoY increase in Group revenue, whilst revenue from Logistics was down five per cent YoY,” the company explained.

The Group Managing Director, UAC of Nigeria, Mr. Folasope Aiyesimoju, in a statement said, “We recorded encouraging performance for the 9 Months to September 2019 period, which reflect our ongoing efforts to drive sustainable growth and profitability.

“Revenue growth was largely on account of positive results from our Animal Feeds & Other Edibles and Packaged Food & Beverages segments. Efforts at driving production and supply chain efficiencies resulted in margin improvements.

“In addition, we benefited from profits on the sale of non-core real estate. We continue to focus on executing our strategy of strengthening people and governance, simplifying our corporate structure and driving earnings growth via improved efficiencies and value creating growth initiatives.

“Notable events over the course of the year include the appointment by Grand Cereals Limited of Mr. Alexander Goma as Managing Director, the appointment by CAP Plc of Mr. David Wright as Managing Director and the approval by the respective boards of directors of UACN and UPDC of a plan to strengthen UPDC’s capital structure. We will continue to implement initiatives in line with our strategy.”

According to the company’s statement, “Free Cash Flow was a negative N7 billion in nine months of 2019, against a positive N7.5 billion in nine months of  2018 on account of N5.4 billion net cash outflow from operations, driven primarily by the N16 billion bridge finance facility extended by UAC to the UPDC. Excluding the bridge finance, the rest of the Group increased operating cash flow by N2.7 billion in 9M 2019 driven primarily by increased sales and improved working capital position in the Animal Feeds & Other Edibles and Packaged Food & Beverages segments.

“Free Cash Flow was also impacted by higher net CAPEX YoY (29per cent increase to N1.6 billion in nine months of 2019) from capital investments in the Packaged Food & Beverages as well as Animal Feeds & Other Edibles segments Previously, UPDC accounted for a substantial portion of the Group’s debt. Following its reclassification as a disposal group, gearing improved to 8.4per cent as at September 30, 2019, down significantly from 32.6per cent as at 2018.

“Net cash position also improved by 156per cent to N15.6 billion as at September 30, 2019. Annualised Return on Equity (ROE) from continuing operations at the end of September 2019 was 10.7per cent, up 423 basis points from 6.4per cent as at the same period last year.

“Annualised Return on Invested Capital (ROIC) increased 101 basis points to 4.4per cent (3.4per cent in 9M 2018).”

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