UAC of Nigeria PLC (UAC) announced its unaudited results for the half-year ended 30 June 2021. UAC’s revenue in H1 2021 increased 26.9% YoY to ₦46.5 billion supported by sales growth across all operating segments. The company’s profit after tax from continuing operations was ₦765 million, up 258% from ₦214 million in H1 2020.
Commenting on the results, Group Managing Director, Fola Aiyesimoju, stated:
“We are gaining traction in our focus on growth. Higher sales across all our operating platforms translated to 27% revenue growth year on year. Price increases and operational efficiency offset input cost escalation resulting in a 105% increase in operating profit.
Profit before tax is 25% higher year on year. Net income was negatively impacted by losses from UPDC PLC and MDS Logistics Limited and we are working with our partners to restore these companies to profitability.”
Segment Revenue
- Animal Feeds and Other Edibles segment (+13.4% YoY) driven by price increases to offset rising raw material costs.
- Paints segment (+59.4% YoY) on account of higher volumes compared to H1 2020 which was impacted by limited sales due to the restrictions in the movement of people and goods in Q2 2020.
- Packaged Food and Beverages segment (+45.5% YoY) driven by volume growth in the snacks, water and dairy categories and price increases in the snacks and water categories.
- Quick Service Restaurant segment (+62.0% YoY) driven by additions to company-owned restaurants (corporate stores) and improved volumes and performance of existing stores.
Key Highlights Review: H1 2021
- Profit before tax was ₦1.3 billion, an increase of 25.3% YoY against ₦1.0 billion in H1 2020. Profit after Tax from continuing operations was ₦765 million, an increase of 258% YoY against ₦214 million in H1 2020.
- Total profit for the period was ₦763 million in H1 2021, a 34% decline from the ₦1.2 billion reported in H1 2020. UAC recorded ₦944 million profit from discontinued operations in H1 2020 which impacts year on year comparison.
- Operating Profit was ₦1.7 billion in H1 2021, 105.4% higher than the ₦828 million recorded in H1 2020. Revenue growth and higher other income (+75.8% YoY), partly attributable to profit on the sale of land by CAP PLC, offset higher operating expenses (+ 9.5% YoY). Operating expenses as a percentage of sales improved by 238 basis points to 15.0%.
- Earnings per share from continuing operations for H1 2021 was 5 kobo, an improvement from the loss per share from continuing operations of 7 kobo in H1 2020.
- Free Cash Flow for the period was negative ₦15.1 billion in H1 2021, compared with positive ₦239 million in H1 2020. Free cash flow was impacted by a deliberate strategy to increase inventory levels in the Animal Feeds and Other Edibles segment and the Paints segments, as well as the shareholder loan disbursed to UPDC PLC to refinance its corporate bond.
- Annualised Return on Equity (ROE) from continuing operations in H1 2021 was 0.6%, 305 basis points lower than H1 2020 (3.7%). Annualised Return on Invested Capital (ROIC) was 299 basis points higher at 5.2% (H1 2020: 2.2%).
