UAC of Nigeria Plc (UAC) has reported a profit after tax of N1.2 billion for the first half of 2023, a turnaround from its loss of N715.9 million in 2022.
The company’s profit was driven by an increase in foreign exchange (FX) gains, which rose 976.47 percent to N3.66 billion from a loss of N0.34 billion in the same period of 2022.
Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said the level of exposure to foreign currency determines whether a company will gain or lose from currency fluctuations.
“The greater the amount of exposure to foreign currency, the higher the risk of exchange rate fluctuations, which could have a serious impact on any company with that exposure,” Yusuf said.
He added: “Companies with naira-denominated assets will benefit from the recent currency devaluation, as the value of their assets will increase in dollar terms.
“However, companies with naira-denominated liabilities will be penalised, as the value of their liabilities will increase in dollar terms.”
Finance income for the conglomerate spiked to N4.36 billion in the first half of 2023 from N0.124 billion recorded in the same period of 2022.
Finance cost marginally reduced by 1.20 percent to N1.64 billion in the first period of 2023 from N1.66 billion recorded in the same period of 2022.
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Revenue increased by 1.59 percent to N52.87 billion in the first half of 2023 from N52.04 billion in the same period of 2022.
The majority of the revenue came from animal feeds and other edibles (N30.64 billion), packaged foods and beverages (N12.25 billion), paints (N9.78 billion), QSR (N1.91 billion), and others (N0.37 billion).
Dividend income increased to N17.13 million in the first half of 2023 from N8.32 million recorded in the same period of 2022.
However, other operating income decreased by 33.6 percent to N435.64 million in the period under review from N656.11 million in the same period of 2022, due to a reduction in profit on the sale of investment property.
Selling and distribution expenses amounted to N4.17 billion, from N3.77 billion in the same period of 2022, and administrative expenses amounted to N4.86 billion in the first half of 2023 from N4.19 billion in the same period of 2022.
Net cash flows generated/(used in) operating activities amounted to N4.79 billion in the first half of 2023 from a loss of N2.17 billion in the same period of 2022.
Net cash flows used in investing activities recorded a loss of N2.13 billion in the first half of 2023 from N1.95 billion in the same period of 2022.
Net cash flows used in financing activities recorded a loss of N3.87 billion in the first half of 2023 from a profit of N5.89 billion in the same period of 2022.
Cash & cash equivalents at the end of the period amounted to N14.99 billion from N13.18 billion in the same period of 2022.
