Nigeria’s foremost conglomerates, UACN last week released its first quarter unaudited results for the period ended March 31, with divestment from one of its subsidiaries partly responsible for an 87 percent quarterly profit after tax.
Turnover for the first quarter of 2020 fell to N19.55 billion no thanks to Covid 19 which impacted its business segments. Same period in 2019, the company posted N20.14 billion sales. Gross profit declined by 4.4 percent to N4.23 billion for the quarter whereas in corresponding period in 2019, UACN realised N4.43 billion as gross profit. Gross margin for the quarter was 21.7 percent as against 22 percent in 2019.
The company’s performance was attributed to the damaging effect of the novel coronavirus.
“Nigeria, along with the rest of the world continues to struggle with the impact of the COVID-19 Pandemic, which is first and foremost a healthcare and humanitarian disaster. We at UAC have assessed the Pandemic’s impact on our people, our businesses and our communities, taking urgent action to protect the health and safety of our employees and stakeholders. We have instituted business continuity plans to ensure operations run smoothly and we monitor these daily. We are also contributing towards alleviating the impact of the Pandemic on our society.
“For our Q1 2020 performance, we recorded modest top line growth, after adjusting for the reclassification of MDS Logistics. Investments in branding, selling and distribution, as well as talent offset gross profit gains resulting in lower operating profits and margin compression. We believe these investments to be critical to drive sustainable growth and profitability over the long-term. We will continue to monitor the effects of the Pandemic and will take strategic and operational decisions to improve the resilience of our businesses and capture opportunities as they arise”, Folasope Aiyesimoju, group managing director said.
UACN divested part of its stake from MDS Logistics when it sold its 8 percent of equity interest to Imperial Capital Limited. This implies that UAC now controls 43 percent stake in MDS Logistics which is now classified as an investment in associate and the MDS profit was reported as “ share in profit/loss of associates, among others.
Investors traded 1.02 million worth of UACN shares last week Thursday worth N6.93million. it closed at N6.90 per share representing -19.8 percent year to date decline in share price.
