• Saturday, April 20, 2024
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High operating expenses push UACN to N4.7bn loss

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UAC of Nigeria recorded an N4.7 billion loss in the full year of 2022, on the back of operating expenses that reached a seven-year high, BusinessDay analysis shows.

The firm’s operating expenses climbed 17 percent to N17.35 billion in the full year of 2022 from N14.84 billion in the full year of 2021.

UAC of Nigeria recorded a loss for the year at N4.7 billion in December 2022 from a profit of N2.58 billion in the same period of 2021.

Commenting on the results, Fola Aiyesimoju, group managing director, UACN 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 N10.7 billion free cash flow across the UAC Group. We will execute growth initiatives with caution until macroeconomic conditions improve,” Aiyesimoju said.

Selling and distribution expenses surged 33.4 percent to N8.46 billion in the full year of 2022 from N6.34 billion in the full year of 2021.

On a quarter-on-quarter basis, selling and distribution expenses grew 26 percent to N2.27 billion in December 2022 from N1.8 billion in December 2021.

Administrative expenses climbed 4.7 percent to N8.9 billion in the full year of 2022 from N8.5 billion in the full year of 2021.

On a quarter-on-quarter basis, Administrative expenses dipped 5 percent to N2.41 billion in December 2022 from N2.54 billion in December 2021.

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Revenue grew 7 percent to N109.2 billion in the full year of 2022 from N101.37 billion.

UAC of Nigeria’s revenue from animal feeds & other edibles contributed N63.4 billion, while packaged food & beverages(N23.24 billion), paints(N19.2 billion), quick service restaurants(N3.07 billion), and others(297.4 million).

The cost of sales climbed 13.5 percent to N94 billion in the full year of 2022 from N82.8 billion in the full year of 2021.

Dividend income dropped 96.4 percent to N9.25 billion in the full year of 2022 from N260.1 billion in the full year of 2021.

UAC of Nigeria’s net finance cost stood at N2.28 billion from N10.1 million in the period reviewed.

Income tax expense stood at N1.23 billion in the full year of 2022, a 19 percent dip from N1.52 billion in the full year of 2021.

The firm’s property, plant, and equipment grew 11.4 percent to N24.74 billion from N22.2 billion in the comparable period.

Trade and other receivables dropped 20 percent to N2.14 billion from N2.67 billion in the period reviewed.

UAC of Nigeria’s inventories grew to N25.53 billion, indicating a 29 percent increase from N36.2 billion in the full year of 2021.

Trade and other receivables grew 18 percent to N7.13 billion in the full year of 2022 from N8.72 billion in the full year of 2021.

Net cash flows generated from/(used in) operating activities to N17.37 billion from a negative of N15.52 billion.

Net cash flows used in investing activities to a negative of N5.78 billion from N2.14 billion.Net cash flows generated from/(used in) financing activities to a negative of N6.4 billion from N4.77 billion.

Total equity dropped 13 percent to N44.3 billion in the full year of 2022 from N50.84 billion in the same period.

Cash and cash equivalents jumped 41.5 percent to N16.6 billion from N11.41 billion in the comparable period.