UACN, Nigeria’s oldest conglomerate grew its nine-month profit from its continuing operations for the first time since 2016, sustaining a profitability trajectory seen in its halfyear performance.
The conglomerate, which recently announced plans to unbundle its loss-making real estate business, however, reported a net loss of N12.8 bn in the period taking into account a huge loss arising from its discontinued operations.
The N17.5 billion loss from discontinued operations was recognised in the nine- month income statement, primarily due to fair value impairment of UACN Property Development Company Plc’s investment in UPDC REIT (N12.5 billion) and UACN’S investment in UPDC (N3 billion) in line with IFRS 5, the company said.
Profit from continuing operations rose by 30.2 percent to N4.7bn, reflecting ongoing efforts to drive sustainable growth and profitability.
Revenue in the first nine months rose by 12.6 percent to N60.55bn, after sales in the third quarter jumped by 13.9 percent, resulting in a gross profit of N12.22bn, 16.1 percent increase from the previous year.
“Revenue growth was largely on account of positive results from our Animal Feeds & Other Edibles and Packaged Food & Beverages segments,” said Folasope Aiyesimoju, UACN’S Group Managing Director. “Efforts at driving production and supply chain efficiencies resulted in margin improvements. In addition, we benefited from profits on the sale of non-core real estate.”
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As sales outpaced direct cost of production, UACN was able to retain N20.2 from every N100 sales in the nine months compared to N19.6 in the corresponding period of 2018.
Operating expenses for UACN grew 28.8 percent year on year in the three quarters of 2019 but operating income surged buoying operating profit to N4.63bn from N3.17bn.
Finance income rose 8.7 percent in the period to N2.21bn while finance cost rose by 52 percent to N292 million. This resulted in a 4 percent growth in net finance income to N1.92bn in the nine months of 2019.
Profit before tax jumped to N6.55bn, up 30.7 percent from N5bn posted in 2018, while tax expenses rose by 31.9 percent to N1.85bn.
Consequently, profit for UACN rose by 30.2 percent to N4.7bn, the first profit growth seen in the nine months since four years ago.
Earnings Per Share (EPS) from continuing operations was 124 kobo in the nine months of 2019, up 58.3 percent from 78 kobo in the same period of 2018.
UACN is a listed conglomerate on the Nigerian Stock Exchange (NSE) and parent of a number of companies including UAC Property Development Company PLC (UPDC), the first company in the real estate sector to be listed on the NSE; and UAC Foods
Limited, manufacturers of Gala Sausage Roll, Supreme Ice Cream and Swan Natural Spring Water.
The company’s other business portfolio includes MDS Logistics Limited, a foremost integrated logistics company with investments in pharmaceutical distribution hubs in key locations across the country; UAC Restaurants Limited with its chain of Mr. Bigg’s and Debonairs Pizza outlets.
In addition to these are Grand Cereals Limited, manufacturers of Vital Poultry and Fish Feeds, Binggo Dog Food, Grand Maize Flour, Grand Cornflakes and Grand Soya Oil; Chemical and Allied Products Plc, leading its industry segment with Dulux Paint ; and UNICO CPFA Limited, a Closed Pension Fund Administrator.
In the three quarters of 2019, figures from the third quarter of 2018 and nine months of 2018 were restated with UPDC classified as a discontinued operation.
