UAC of Nigeria Reports Pre-Tax Profit of N9.030 Billion in Q1 2024

UAC of Nigeria reported a pre-tax profit of N9.030 billion in Q1 2024
UAC foods building

UAC of Nigeria Plc announced a pre-tax profit of N9.030 billion for the first quarter ended March 31, 2024, reflecting a 1,064% year-on-year growth.

The company’s unaudited condensed consolidated financial accounts for the first quarter of 2024 show that UACN had remarkable revenue of N40.556 billion, up 64.73% from the N24.620 billion recorded in the same period the previous year. Additionally, 34% of the total revenue in 2023 will come from this source.

Key highlights (Q1 2024 versus Q1 2023)

  • Revenue: N40.556 billion +64.73% YoY
  • Cost of sales: N31.462 billion +47.42% YoY
  • Gross profit: N9.094 billion +177.37% YoY
  • Selling and Distribution expenses: N2.542 billion +29.08% YoY
  • Admin expenses: N3.431 billion +56.81% YoY
  • Operating profit: N3.401 billion +585.71% YoY
  • Foreign exchange gain: N5.916 billion +8,190.15% YoY
  • Finance cost: N1.374 billion +107.51% YoY
  • Profit after tax: N5.918 billion +610.59% YoY
  • Earnings per share: N1.85 +737.93% YoY

Diversification may be seen in the income composition, which is made up of 20.46% paints, 29.24% packaged goods and beverages, and 47.34% animal feeds.

Increased stability and resilience against market changes and the dangers associated with over-reliance on any one product or market can be achieved by spreading this revenue stream across numerous areas.

The remarkable performance of the bottom line may also be attributed to the revenue growth of 65%, which outpaced the 47% growth in the cost of sales, as well as a significant increase in foreign currency gain.

The business still has to deal with high administrative and distribution costs in addition to rising interest costs, which increased by 108% in a single year to N1.374 billion.

The substantial influence of these expenses on operational profit is shown in the 8.39% operating profit margin. This emphasizes how critical it is to pay close attention to these negative consequences on the company’s financial performance and to apply strategic management techniques to mitigate them.

The good news is that, in spite of these difficulties, the business is well-positioned to maintain its 2023 profitability level following a 2022 loss. Roughly 66% of the profit after taxes reported in 2023 is represented by the profit after taxes for Q1.

The share price appears to have reflected the company’s strong start to the year as well as signs of resilience and ability to maintain its profitability trajectory.

The stock increased 8.87% from its previous closing price on April 26, 2024, indicating that investors are pleased with the company’s success and expect it to continue growing and turning a profit.

Therefore, to maintain and increase its financial performance going forward, the company must keep putting into practice efficient cost-management, operational efficiency, and market-driven initiatives.

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