Sausage, feeds drive UACN’s earnings to 10-yr high

UAC of Nigeria Plc, a conglomerate and manufacturer of food products, defied economic woes in 2024 by recording its highest profit of N16.9 billion in 10 years on sales of gala and livestock feeds.

According to the group’s unaudited financial statement for the fiscal year 2024, profit-after-tax (PAT) was 145 percent higher than the N8.9 billion recorded in 2023.

BusinessDay’s findings show that the increase in profitability was driven by higher earnings from the group’s subsidiaries and foreign exchange gains during operating activities.

The conglomerate navigated Nigeria’s foreign exchange crisis caused by the devaluation of naira by recording a 123.4 percent increase in foreign exchange gain to N9.4 billion from N4.2 billion in 2023.

The conglomerate operating in Nigeria’s food and beverage, warehousing, real estate, paint, manufacturing, agriculture, services, and logistics sectors has several subsidiaries, such as UAC Foods Limited, Mr Bigg’s, Livestock Feeds, UAC Dairies, and Chemical and Allied Products Plc.

UACN outpaced the 55.5 percent increase to N151.3 billion in cost of sales from N99.2 billion posted in FY 2023 by recording a 104.6 percent growth to N18.6 billion in operating profit in 2024 from the N9.09 billion recorded in 2023.

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This growth was driven by N9.08 billion generated from the Edibles and Feeds business operations, N5.3 billion from Paints, and N5.14 billion from packaged foods and beverages.

Its revenue in the full year (FY) 2024 grew to N197.6 billion from N120.5 billion, thanks to Gala and Livestock Feeds.

Edibles and feed business was a huge money spinner, as its revenue surged by 53.7 percent to N102.8 billion, from N66.9 billion as of 2023. Although, the packaged food and beverage business is also a huge revenue contributor with N58 billion.

Its paint business added to its income sources, as it recorded N36.4 billion in revenue, N2.5 billion from QSR, and N1.8 billion from other businesses.

It’s interesting to know that UAC Foods also recorded a 373 percent increase in operating profit to N5.14 billion from N1.3 billion. This led to a 300 percent increase in profit before-tax of N6.7 billion from N2.2 billion recorded in 2023.

The subsidiary grew revenue by 102 percent to N58 billion from N28.7 billion in 2023, contributing almost N30 billion to the total revenue of the conglomerate.

UACN are makers of Gala Sausage Rolls, Gala Chinchin, Kingsway Pastry Rolls, Supreme Ice Cream, Funtime Coconut Chips, and SWAN Natural Spring Water in Lagos, Abeokuta, and Ibadan, Nigeria. In the first-half of 2024, UAC Foods Limited launched a new product ‘Gala Chin Chin’.

In 2024, the profit before-tax generated from packaged food and beverages stood at N6.7 billion, Edibles and Feed were N5.7 billion, Paints recorded N6.7 billion, QSR had a loss of -N1.3 billion while others were N9.6 billion.

Oluyemi Oloyede, CEO of UAC Foods said “Innovation is very important when it comes to branded foods. We launched a new product as a brand extension of our 62-year-old Gala brand in August 2024, and we are very proud of the feedback that we have received from the market so far and the support from our partners – most of whom have been with us for decades.”

“As we continue to deliver these strong results in 2024, we are aware of the challenges in the business environment, but we remain confident, resilient, and resolute to finish the year strong and start 2025 on a brilliant note,” he added.