Following a pre-tax loss of N4.4 billion in 2022, UAC Nigeria Plc showed a return to profitability in 2023 with a pre-tax profit of N12.7 billion.
UAC reported N118.7 billion in sales for 2023, a 9% increase over the N109.3 billion in 2022, according to its financial statements.
Increased sales in each of the group’s operating segments—Paints (+24%), Packaged Food and Beverages (+23%), Quick Service Restaurants (+21%), and Animal Feeds and Other Edibles (+2%)—were the primary drivers of revenue growth.
The group reported a gross profit margin of 18.4% with a N21.8 billion gross profit, up 5.36 percentage points from the 13.0% reported in 2022. Additionally, the group reported an operational profit in 2023 of N9.1 billion as opposed to an operating deficit in 2022 of N2.4 billion.
In its news release, the company stated that the following factors contributed to UAC’s outstanding performance in 2023: higher revenue from price hikes and sales growth; cost-cutting initiatives implemented in its Animal Feeds and Other Edibles division; and profit from the sale of non-core property assets.
Speaking about the group’s performance in 2023, UAC Nigeria Plc’s Group Managing Director, Fola Aiyesimjou, stated that the goal for the group was to accelerate development in the Packaged Foods business and revers the trend of losses in the Animal Feeds industry.
“Our biggest objective is to reverse the performance trend of the Animal Feeds business and to address the challenges that negatively impacted the performance of our Packaged Food and Beverages business,” he said during the earnings call for the 2022 fiscal year. We are happy to report that this was successfully implemented, and that performance in 2023 was fueled by good risk management techniques as well.
Grand Cereals Limited and Livestock Feeds Plc, the group’s Animal Feeds and Other Edibles divisions, reported a 1.5% revenue growth in 2023 to N66.9 billion from N65.9 billion generated in 2022, in accordance with Aiyesimoju’s call. Following that, the segment’s pre-tax earnings increased significantly by 64%, resulting in a N2.5 billion loss before taxes as opposed to the N6.9 billion loss before taxes recorded in 2022.
The business segment of the corporation that deals with packaged foods and beverages reported sales of N28.7 billion in 2023, up 23.1% from N23.3 billion in 2022.
The division that showcases UAC Foods Limited, the manufacturer of Funtime Snacks, Gala sausage rolls, Supreme Ice cream and Swan Table Water, reported a N2.7 billion profit before taxes.