UAC of Nigeria Plc [UACN] has overwritten its net loss position in the first quarter with a finance income of N3.9 billion plus an increase of close to N4 billion in sales revenue in the second quarter.
The two favourable developments have changed the fortunes of the conglomerate from a net loss of N1.2 billion in the first quarter to an after-tax profit of N2.4 billion in the second, summing up to an after-tax profit of N1.2 billion at the half year.
The company’s unaudited half-year financial report at the end of June 2023 shows a strong recovery in sales revenue from a drop of 11 per cent in the first quarter to an increase of 16 per cent year-on-year in the second.
Quarterly sales revenue rose from N24.6 billion for the first quarter to N28.3 billion for the second quarter, adding up to the company’s half-year turnover figure in the region of N53 billion.
The company added cost savings from production costs to the gain in sales in the second quarter – which powered an increase of over 38 per cent in gross profit to N5.3 billion for the quarter.
With further cost savings extracted from selling distribution and administrative expenses, management was able to drive a turnaround from an operating loss of N257 million in the same quarter last year to an operating profit of N665 million for the second quarter.
The big boost came from finance income that advanced from less than N220 million in the second quarter of last year to N3.9 billion this year. Net finance income amounted to N2.9 billion against a net finance cost of N630 million over the same period.
Another quickening force is the share of associate profit that similarly scurried from a loss of over N79 million to a profit of N486 million.
With the favourable developments, UACN built a pre-tax profit of N4 billion in the second quarter and an after-tax profit of N2.3 billion, rising from losses of N966 million and N353 million last year respectively.
The upturn in the second quarter was largely diffused by the weak performance of the company in the first quarter.
The half-year sales figure is a slight improvement of 1.6 per cent to less than N53 billion from the corresponding figure of N52 billion in 2022. Sales remained weak across key market segments, including the main revenue source – animal feeds and other edibles – nonetheless better than the record of loss of sales across the market segments in the first quarter.
Cost of sales grew slightly ahead of sales at the half year, leading to a decline of 3.6 per cent in gross profit to N8.6 billion.
With even stronger increases in selling and distribution and administrative expenses as well as a drop in other operating income, operating results fell from N1.6 billion profit in the same time last year to a loss of N35 million at half year.
The inflow from finance income, amounting to N4.4 billion at half-year provided the saving grace for the company, turning its operating loss into a pre-tax profit of N3.2 billion.
Contributing to the profit boost also is a share of associate profit of N481 million, which is an upswing from an associate loss of N58 million in the same period last year.
The company’s closing after-tax profit of N1.2 billion at half a year is a turnaround from a loss of N716 million in the same period in 2022.
Earnings per share amounted to 53 kobo at half year, improving from loss per share of 18 kobo in the same period last year and 29 kobo per share loss in the first quarter.
Comments are closed.