UAC of Nigeria has used initiatives to boost profitability through product offerings to consumers, geared at gaining entry to new markets.
The diversified holding company recorded N16.9 billion after-tax profit in 2024, indicating the highest profit in a decade from N8.84 billion in 2023.
The initiatives employed by UAC of Nigeria involved products offering value to the consumers to pursue new markets, focus on pricing and margin, and risk management as initiatives to boost profitability.
“Specific initiatives include aggressively pursuing new markets with products offering value to the consumer, a rigorous focus on pricing and margin, and careful risk management regarding interest rates and foreign exchange,” Folasope Aiyesimoju, group managing director of UACN, said while commenting on the 2024 financial performance.
“Our disciplined approach to financial management was instrumental in delivering these results. We maintained a strong focus on cost optimisation, working capital efficiency, and prudent risk management, which supported top-line growth and profitability,” Funke Ijaiya-Oladipo, group finance director, said while speaking about UAC of Nigeria’s financial strategy.
“As we look ahead to 2025, we remain committed to driving sustainable growth through operational excellence, strategic capital allocation, and continued focus on delivering value to our shareholders,” she said.
Aiyesimoju, group managing doctor of UACN, said there were improvements in profitability, which were recorded across the firm’s core operating segments.
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The firm’s revenue grew 64 percent to N197.6 billion in 2024 from N120.5 billion in 2023. Further analysis of the segment contributors to total revenue reveals that edibles and feed contributed N100.8 billion, packaged food and beverages contributed N57.7 billion, paints contributed N36.4 billion, quick service restaurants contributed N2.51 billion, and others contributed N221.09 million.
The firm stated in its earnings release statement that its performance in 2024 can be attributed to the exceptional performance to volume and value growth across key operating segments, notably packaged food and beverages, feeds, and paints.
It also noted that a strong people-focused strategy and strategic investments in technology were also key.
Profit margin increased to 8.6 percent from 7.4 percent, and EBIT margin increased by 189 basis points to 9.4 percent in 2024.
The firm recorded 53 percent growth in input cost to N48.9 billion during the period reviewed. The firm’s share price stood at N35.5 as of March 25, with a volume of 128,802 and shares outstanding of 2.93 billion.
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Revenue segments
Edibles and Feed
Revenue from edibles and feed stood at N100.8 billion in 2024 from N64.2 billion in 2023.
The revenue increased by 65 percent to N34.5 billion in the fourth quarter of 2024 from N21 billion in the fourth quarter of 2023 on account of price increases implemented in response to rising costs.
The segment recorded an operating profit of N3.2 billion in Q4 2024 from N1.2 billion in Q4 2023.
Packaged food and beverages
Packaged food and beverages revenue increased to N36.4 billion in 2024 from N23.9 billion in 2023.
The packaged food and beverages contributed N16.6 billion in revenue, an 81 percent growth from N9.1 billion in Q4 2023, driven by volume growth across all categories.
Volume growth was supported by Kingsway pastry roll, and the launch of four new products over the course of the year – Gala, Chin-Chin, and Kingsway Loaf in the snacks category, and vanilla ice-cream and yoghurt pouches under the Supreme brand in the dairies category.
Operating profit grew to N1.1 billion compared to N295 million recorded in Q4 2023, driven by sales growth.
Paints
Paints recorded N12.7 billion revenue in the fourth quarter of 2024, 47 percent higher than N8.6 billion recorded in the fourth quarter of 2023 on account of price increases in response to escalating costs.
The segment recorded operating profit growth of 57 percent at N2.5 billion in Q4 2024 from N1.6 billion in Q4 2023, which is supported by top-line growth and the impact of strategic decisions on pricing and margins, as well as enhanced operational efficiency.
Quick Service Restaurants (QSR)
Quick Service Restaurants recorded N2.51 billion in 2024 from N3.72 billion in 2023.
The QSR business recorded revenue of N513 million in the fourth quarter of 2024 from N938 million in the fourth quarter of 2023, impacted by lower sales, due to the closure of unprofitable stores, according to the firm.
Operating loss decreased by 47 percent to N263 million in the fourth quarter of 2024 from N499 million in Q4 2023, impacted by lower operating costs following the management’s implementation of cost optimisation initiatives.
