UAC Property Development Company (UPDC), one of Nigeria’s leading real estate investment firms, is grappling with the challenges posed by a challenging macroeconomic environment, as escalating costs drive its operating profit into a deficit of 101 percent.
UPDC’s operating profit plunged from a profit of N229.13 million in 2022 to a loss of N1.6 million in 2023, primarily attributed to increased administrative expenses.
Administrative expenses surged by 61.8 percent, soaring from N309.77 million in the first half of 2022 to N810.76 million in the corresponding period of 2023.
Operating profit is the net income derived from a company’s core operations.
Operating income also experienced a decline, dropping from N140.9 million in the first half of 2022 to N62.5 million in the comparable period of 2023.
Conversely, UPDC’s revenue demonstrated growth, marking an increase from N1.14 billion in the first half of 2022 to N2.14 billion in the same period of 2023.
Despite these shifts, the company registered a loss after tax, amounting to N231.2 million for the period, in contrast to a loss of N72.28 million in the first half of 2022.
Taxation expenses surged by 136 percent, rising from N37.8 million in 2022 to N89.3 million in the first half of 2023.
Total equities and liabilities amounted to N18.74 billion for the period under review.
On the financial front, finance costs saw a decline, decreasing by N209.9 million in the first half of 2023 compared to N260.9 million in the same period of 2022.
Meanwhile, finance income amounted to N69.6 million in the initial period of 2023, as opposed to N25.6 million recorded in 2022.
The company’s cash flow from operating activities experienced a decline, dropping to N541.2 million in the first half of the year from N640.6 million in the same period of 2022.
In terms of cash flow from investing activities, UPDC reported a loss of N52.56 million during the review period, a contrast to the N19.49 million gain recorded in the corresponding period of 2022.
Net cash flow from financing activities faced a loss of N209.86 million in the review period, in contrast to a loss of N172.7 million in the first half of 2022, primarily driven by interest payments.
The period concluded with cash and cash equivalents amounting to N3.29 billion, compared to N2.2 billion at the close of the same period in 2022.