WorldStage Newsonline– UAC of Nigeria PLC (UAC) announced its unaudited results for the year ended 31 December 2022 with operating loss of ₦1.3 billion compared to operating profit of ₦5.0 billion in 2021.
The highlights of the result released at the Nigerian Exchange include; Revenue of ₦109 billion, 8% higher as a result of topline growth in all segments apart from Packaged Food and Beverages(-1.7%). Animal Feeds and Other Edibles (+5.0%), Paints (+25.1%), and Quick Service Restaurants (+39.3%); Gross profit 13% lower at ₦15 billion impacted by rising input costs; Gross margin compressed 337 bps to 13.9%.
The group said its erformance was impacted by ₦3.6bn operating loss from the Animal Feeds and Other Edibles segment which more than offset the ₦3bn operating profit from the Paints segment; Significantly higher electricity and power (+₦2bn) and distribution costs (+₦2bn) across the UAC group; Unrealised fair value loss of ₦676mn recognized on investment properties at the holding company.
It noted that in 2021, the holding company recognized a one-off dividend as well as a fair value gain post unbundling the UPDC Real Estate Investment Trust (“UPDC REIT”) (₦569mn) which impacts year on year comparison.
With loss before tax of ₦3.4 billion, it said profitability was further impacted by finance costs (500bps interest rate increase YoY).
The group listed strategic initiatives during the year to include 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.
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 N10.7bn free cash flow across the UAC Group. We will execute growth initiatives with caution until macroeconomic conditions improve.”