Copyright bizwatchnigeria
UAC of Nigeria Plc has reported a ₦703 million pre-tax loss for the third quarter of 2025, marking its first quarterly loss in recent years and a sharp reversal from the ₦5.9 billion profit posted in the same period last year. The conglomerate blamed the poor performance on one-off acquisition expenses linked to its purchase of CHI Limited, rising finance costs, and the underperformance of its Animal Feeds and Edibles segment, which offset gains recorded in Paints and Packaged Foods. For the nine months ended September 30, 2025, UAC’s profit before tax stood at ₦10.4 billion, representing a 50.1% decline from ₦20.8 billion in the same period of 2024. However, on an adjusted basis—excluding acquisition and foreign exchange impacts—underlying pre-tax profit rose to ₦12.2 billion, compared to ₦10.6 billion a year earlier. Financial Highlights Revenue: ₦159.6bn (↑19.8% YoY from ₦133.2bn) Gross Profit: ₦39.4bn (↑28.1% YoY from ₦30.7bn) Operating Profit: ₦13.4bn (↑9.1% YoY from ₦12.3bn) Profit Before Tax: ₦10.4bn (↓50.1% YoY from ₦20.8bn) Profit for the Period: ₦5.4bn (↓60.6% YoY from ₦13.7bn) Earnings per Share: 179 kobo (↓ from 426 kobo in 2024) Total Assets: ₦161.5bn (↑ from ₦157.7bn as at Dec. 2024) External Debt: ₦43.3bn (↑ from ₦41.5bn as at Dec. 2024) Cash Balance: ₦46.8bn (↑ from ₦40.6bn as at Dec. 2024) Group Managing Director Fola Aiyesimoju said the loss reflected the impact of one-off transaction charges, higher borrowing costs, and the weak performance of the Animal Feeds business. “While Paints and Packaged Foods delivered solid growth, the acquisition-related expenses and elevated finance costs weighed on our third-quarter results,” Aiyesimoju noted. The company completed the 100% acquisition of CHI Limited (Chivita | Hollandia) on October 3, 2025, following regulatory approval by the Federal Competition and Consumer Protection Commission (FCCPC). The move gives UAC full ownership of one of Nigeria’s leading juice and dairy producers, strengthening its presence in the fast-moving consumer goods (FMCG) sector. While UAC did not disclose the full financial terms of the deal, it recorded a ₦19.1 billion deposit for investment in its financial statements—widely believed to relate to the CHI acquisition. The company stated that initial accounting for the transaction had not been completed, with comprehensive disclosures expected in subsequent filings. Performance Drivers Revenue growth was largely supported by the Paints segment, which rose 27% year-on-year to ₦10.2 billion, and the Packaged Food and Beverages segment, up 25% to ₦17 billion, driven by higher sales volumes and pricing adjustments. However, the Animal Feeds and Edibles segment dragged overall performance, as revenue plunged 25% to ₦21.4 billion, reflecting a steep fall in commodity prices—particularly maize and soya—which led to high-cost inventories and lower market selling prices. Operating expenses surged 56% in Q3, largely due to ₦2.3 billion in transaction-related costs, rising personnel expenses, and higher logistics costs. Additionally, finance expenses increased sharply amid high borrowing rates and the absence of last year’s foreign exchange gains. Despite these pressures, cash flow from operations remained strong, generating ₦18.5 billion in free cash flow, while cash reserves increased to ₦46.8 billion. UAC’s gearing ratio improved slightly to 60% (from 62%), and the quick ratio rose to 1.0x (from 0.7x). Market Reaction The market responded negatively to the results, with UAC’s share price falling 6.47% to close at ₦66.50 on the day the financials were released. Despite the decline, the stock remains among the top performers on the Nigerian Exchange (NGX) in 2025—up 207% year-to-date, though below its ₦81 peak in May. No interim dividend was declared for the quarter. Analysts say UAC’s long-term outlook remains positive, driven by its growing footprint in FMCG and the anticipated integration benefits from CHI Limited. However, they warn that elevated finance costs, acquisition expenses, and inflationary pressures could continue to weigh on short-term profitability.
