•Reports N2.92b decline in pre-tax profit
UAC Nigeria reported about N2.921billion or 58 per cent decline in its half-year (H1) pre-tax profit, the company’s result at the Nigerian Stock Exchange (NSE) shows.
The company’s consolidated statement of comprehensive income for the period ended June 30, 2015 revealed its H1’15 profit before tax (PBT) declined from N5.061 billion to N2.145 billion.
UAC also reported about N1.97billion or 70 per cent decline in profit after tax (PAT) at N1.037 billion from half-year (H1) 2014 level of N3.481billion. The company’s revenue was also down by 7 per cent from N40.255 billion to N37.375 billion.
UAC is a leading diversified company, operating in foods and beverage, real estate, paints and logistics sectors of the economy. It has remained a foremost and active participant in Nigeria’s economic landscape since 1879.
Larry Ettah, the company’s Group Managing Director/Chief Executive Officer, said the H1 result “was characterised by political uncertainties, security concerns, foreign exchange volatility and petroleum product shortages, all leading to a reduction in consumer spend across all categories.
“These challenges, coupled with intense competition and rising input costs adversely impacted our operations during the period. Turnover trend in 2015 reflects the challenge of the environment and the consumer.”
UAC Nigeria group comprises UAC Foods, UAC Restaurants, Grand Cereals, Livestock Feeds, Chemical and Allied Products, Portland Paints and Products Nigeria, UPDC, MDS Logistics, UNICO Closes-PFA.
UAC evolved into a holding company with strong regional and international partnerships in a bid to enhance sustainable growth.
The partnerships are UAC Foods, a business partnership between Tiger Brands holding 49 per cent of the equity, and UAC (51 per cent); MDS Logistics, a joint venture with Imperial Logistics (49 per cent), UAC (51 per cent); UAC Restaurants, where Famous Brands holds 49 per cent, UAC (51 per cent).
UAC also operates successful joint ventures in the real estate business and technical collaboration in its paint business.
The company’s business expansion drive has led to acquisition of 51 per cent equity in Livestock Feeds Plc, foremost manufacturers of poultry feeds and 51 per cent equity stake in Portland Paints and Products Nigeria Plc, makers of Sandtex paint. These acquisitions have deepened the Company’s play in the paints and feeds markets.
UAC of Nigeria plc linked its half-year revenue decline largely to drop in sales in UPDC (N2.4billion) and Grand Cereals (N800million). UAC of Nigeria’s net finance costs was down 31per cent due to UPDC capitalisation of interest costs on some projects in H1.
While the company foresees insecurity to remain until end of fourth-quarter (Q4), it noted that restructuring of debts of State Governments and bail–out funds will improve purchasing power “but painful structural adjustment by public sector is inevitable”.
“Government revenue falls, caused by declining crude petroleum prices should encourage Public Private Partnership (PPP) arrangements.
“Uncertainties around forex availability and rate volatility will remain but gap between official and unofficial rates should narrow. Inflation will likely attain double digit by year end,” Ettah said, looking into H2.
“We are resolute in the pursuit of our strategies despite the current challenges and remain focused on the opportunities that will emerge in the near-term.”
UAC brand portfolio includes Gala Sausage Roll, Mr Bigg’s, Snaps, Funtime Coconut Chips, Supreme Ice Cream, Delite Fruit Juice, Swan Natural Spring Water, Gossy Warm Spring Water, Dulux, Grand Soya Oil and Grand Groundnut Oil, Vital Feeds, Livestock Feeds, and Sandtex.
The company blazed the trail by fully franchising its Quick Service Restaurants (QSR) operations, a strategy serving as a model for the sector, and is replicated by competition.
Gala Sausage Roll and Mr Bigg’s are the leading QSR brand in Nigeria, dominant household brands for many years.
UAC business portfolio includes
• UACN Property Development Company (UPDC), the first company to be quoted on the Nigerian Stock Exchange
• UAC Foods, which produces Gala Sausage Roll, Delite Fruit Juice, Supreme Ice Cream and SWAN Natural Spring Water
• MDS Logistics, a foremost integrated logistics company with investment in pharmaceutical distribution hubs
• UAC Restaurants, with its growing chain of Mr Bigg’s outlets
• Grand Cereals, manufactures Vital Feeds, Grand Maize Flour, and Grand Oil brands
• Chemical and Allied Products, leading its industry segment with Dulux paint
• Warm Spring Waters Nigeria, manufacturer of “GOSSY” Spring Water
• UNICO CPFA, a closed Pension Fund Administrator.
