UAC of Nigeria Plc has released its results for the first-quarter (Q1) period ended March 31, 2025. Its revenue of N56billion represents 38 percent increase compared to Q1 2024, driven by sales growth recorded across core operating segments. Also, N14.3billion gross profit implies it went up by 57 percent than in Q1 2024. Gross margin expanded 303 basis points (bps) to 25.5 percent supported by volume growth, disciplined pricing, and cost optimisation initiatives across the Group.
The company recorded N6.8billion operating profit in Q1’25, 101 percent higher than Q1 2024; underlying operating profit of N6.4billion excluding N446million gain from disposal of non-core property asset, and profit before tax (PBT) of N5billion. Excluding exceptional items, underlying PBT was N4.6billion, 48 percent higher than Q1 2024 underlying PBT of N3.1billion.
Commenting on the results, Fola Aiyesimoju, Group Managing Director, UAC of Nigeria Plc stated: “In Q1 2025, we worked on our core themes of talent acquisition and development, disciplined capital allocation, embracing technology, enhancing governance and controls, and driving sustainability. “To deliver value to the consumer, we focused on consistent quality and availability, as well as new product development to increase range. Group revenue increased 38 percent to N56billion and operating profit doubled to N6.8billion. Rising interest rates impacted net profit, with underlying profit before tax 48 percent higher year-on-year. The non-recurrence of N5.9billion FX gains recorded in Q1 2024 affected year-on-year comparisons.”
Revenue in Q1 2025 increased 38 percent YoY to N56 billion supported by volume growth in the Packaged Food and Beverages segment and price adjustments across all businesses. Gross profit increased by 57 percent to N14.3 billion and gross profit margin expanded 303 basis points to 25.5 percent, on account of volume, growth disciplined pricing and operational efficiency.
Cost optimisation initiatives launched in 2024, including reformulation to incorporate alternative raw materials, as well as a more disciplined technology led approach to procurement practices, contributed to a moderation in raw material cost increases despite inflationary pressures.
Read also: UACN bets on long-term gains as dividend strategy prioritizes value creation
Operating Profit of N6.8 billion in Q1 2025 (Q1 2024: N3.4 billion) and operating profit margin expanded 381 basis points to 12.2percent. Underlying operating profit of N6.4 billion excluding N446 million gain from disposal of non-core property asset.
Operating expense of N8.1 billion was 35percent higher compared to Q1 2024, driven by inflationary pressures. The most significant increases were electricity and power, personnel, and marketing, driven by higher electricity tariffs and diesel prices, marketing activities for new product launches, and cost of living adjustments for employees. Despite broader inflationary pressure on operating costs, the Group recorded a modest improvement in opex/sales ratio of 32bps to 14.5percent in Q1 2025 from 14.8percent in Q1 2024.
Net finance cost of N2.1 billion in Q1 2025 compared to a net finance income of N5.1 billion in Q1 2024. The shift reflects higher borrowing costs in the Edibles and Feed segment, driven by increased short-term borrowing to fund the purchase of seasonal raw materials and elevated interest rates averaging 26 percent compared to 20 percent in Q1 2024. In addition, the nonrecurrence of the prior period FX revaluation gain impacts year on year comparison. Share of profit from associate companies of N301 million, 39 percent lower compared to N493 million in Q1 2024 impacted by the non-recurrence of a one-off gain from disposal of non-core property at MDS Logistics in Q1 2024.
Profit before tax (PBT) was N5 billion, compared to N9 billion in Q1 2024. Excluding the exceptional items (N5.9 billion treasury gains in 2024 and non-recurring property gain in the current period), Q1 2025 underlying PBT was N4.6 billion, 48 percent higher than underlying Q1 2024 profit of N3.1billion. Total Profit for the period was N3.3 billion compared to N5.9 billion profit in Q1 2024. Underlying PAT was N2.9 billion compared to N2 million underlying PAT in the prior year.
Earnings per share of 106 Kobo in Q1 2025 compared to 185 Kobo per share recorded in Q1 2024. Underlying EPS adjusted for exceptional items in Q1 2025 was 91 kobo, compared to underlying loss per share of 17 kobo in Q1 2024. Annualised Return on Invested Capital (ROIC) was 45.1 percent (Q1 2024: 27.1percent).
