Economy
UAC Nigeria’s Strategy to Invest for Growth Yields Results in Q3
By Dipo Olowookere
Though the nine months results of UAC Nigeria Plc were not too impressive, its third-quarter earnings were better and this was because of the decision of the company to invest for growth and free up its burden.
In Q3 of 2020, the revenue jerked by 10.5 per cent to N21.2 billion from N19.2 billion in Q3 2019 compared with the meagre 1.7 per cent rise in nine months of 2020 N57.8 billion from N56.8 billion achieved in the same period of last year.
The Q3 growth in turnover was as a result of revenue growth across all operating segments (Animal Feeds & Other Edibles +10 per cent, Paints +18 per cent, Packaged Food and Beverages +8 per cent, and Quick Service Restaurants +16 per cent).
Volume growth in the fish feed and cereals categories, as well as, price increases across major categories to offset rising raw material costs contributed to topline growth in the Animal Feeds & Other Edibles segment.
Paints sales rebounded strongly following the easing of COVID-19-related restrictions, growing 18 per cent compared to the same quarter last year as a result of strong volume growth across the portfolio.
The Packaged Food and Beverages segment achieved growth in key categories i.e snacks, dairy, and water. Quick Service Restaurants revenue growth was primarily driven by sales from the recently launched company-owned restaurant.
In the third quarter of the year, when the lockdown in Nigeria was eased, the earnings before interest and taxes (EBIT) declined 23.7 per cent to N1.2 billion in Q3 2020, however, adjusting for non-recurring and non-operating income in Q3 2019 (profit from the sale of non-core real estate N631.3 million and write back of statute-barred unclaimed dividend N206.3 million), underlying EBIT increased 65.1 per cent year-on-year and EBIT margin increased 186bps to 5.6 per cent.
A key contributor to the improvement in underlying EBIT was the 642.5 per cent YoY increase in Animal Feeds & Other Edibles operating profit in Q3 2020.
In the third quarter of the year, the profit before tax reduced by 24.7 per cent to N1.4 billion from N1.9 billion, while the nine months pre-tax profit shed 58.8 per cent to N2.5 billion from N6.0 billion.
Business Post reports that the profit after tax from continuing operations rose by 8.1 per cent to N1.2 billion from N1.1 billion in Q3 2019, but dropped 67.0 per cent in nine months to N1.5 billion from N4.4 billion.
A N493 million loss from discontinued operations was recognised in Q3 2020 attributable to UPDC versus the N14.0 billion loss recorded in Q3 2019. As a result, UAC Nigeria’s total profit for the period was N743 million in Q3 2020, a reversal from the N12.9 billion loss reported in Q3 2019, while the earnings per share (EPS) for the period was 15 kobo, up from negative 274 kobo in Q3 2019.
“Our strategy to invest for growth yielded encouraging results in the third quarter with consolidated revenues, gross profit and operating profit (excluding non-recurring items) growing 11 per cent, 20 per cent and 65 per cent respectively,” the Group Managing Director, Folasope Aiyesimoju, stated.
“We recorded topline growth across all our continued operations in the quarter. We are focused on strategies to mitigate the impact of a challenging foreign exchange environment and managing the recent trend of cost escalation.
“We expect to complete the sale of a controlling interest in UACN Property Development Company PLC to Custodian Investment PLC and are supportive of the recently announced merger between Chemical and Allied Products PLC and Portland Paints and Products Nigeria PLC,” the company’s chief said.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited witnessed Santa Claus rally on Wednesday after it closed higher by 0.12 per cent.
Strong demand for Nigerian stocks lifted the All-Share Index (ASI) by 185.70 points during the pre-Christmas trading session to 153,539.83 points from 153,354.13 points.
In the same vein, the market capitalisation expanded at midweek by N118 billion to N97.890 trillion from the preceding day’s N97.772 trillion.
Investor sentiment on Customs Street remained bullish after closing with 36 appreciating equities and 22 depreciating equities, indicating a positive market breadth index.
Guinness Nigeria chalked up 9.98 per cent to trade at N318.60, Austin Laz improved by 9.97 per cent to N3.20, International Breweries expanded by 9.85 per cent to N14.50, Transcorp Hotels rose by 9.83 per cent to N170.90, and Aluminium Extrusion grew by 9.73 per cent to N16.35.
On the flip side, Legend Internet lost 9.26 per cent to close at N4.90, AXA Mansard shrank by 7.14 per cent to N13.00, Jaiz Bank declined by 5.45 per cent to N4.51, MTN Nigeria weakened by 5.21 per cent to N504.00, and NEM Insurance crashed by 4.74 per cent to N24.10.
Yesterday, a total of 1.8 billion shares valued at N30.1 billion exchanged hands in 19,372 deals versus the 677.4 billion shares worth N20.8 billion traded in 27,589 deals in the previous session, implying a slump in the number of deals by 29.78 per cent, and a surge in the trading volume and value by 165.72 per cent and 44.71 per cent apiece.
Abbey Mortgage Bank was the most active equity for the day after it sold 1.1 billion units worth N7.1 billion, Sterling Holdings traded 127.1 million units valued at N895.9 million, Custodian Investment exchanged 115.0 million units for N4.5 billion, First Holdco transacted 40.9 million units valued at N2.2 billion, and Access Holdings traded 38.2 million units worth N783.3 million.
By Adedapo Adesanya
Nigerian food and beverage company, Rite Foods Limited, has extended warm Yuletide greetings to Nigerians as families and communities worldwide come together to celebrate the Christmas season and usher in a new year filled with hope and renewed possibilities.
In a statement, Rite Foods encouraged consumers to savour these special occasions with its wide range of quality brands, including the 13 variants of Bigi Carbonated Soft Drinks, premium Bigi Table Water, Sosa Fruit Drink in its refreshing flavours, the Fearless Energy Drink, and its tasty sausage rolls — all produced in a world-class facility with modern technology and global best practices.
Speaking on the season, the Managing Director of Rite Foods Limited, Mr Seleem Adegunwa, said the company remains deeply committed to enriching the lives of consumers beyond refreshment. According to him, the Yuletide period underscores the values of generosity, unity, and gratitude, which resonate strongly with the company’s philosophy.
“Christmas is a season that reminds us of the importance of giving, togetherness, and gratitude. At Rite Foods, we are thankful for the continued trust of Nigerians in our brands. This season strengthens our resolve to consistently deliver quality products that bring joy to everyday moments while contributing positively to society,” Mr Adegunwa stated.
He noted that the company’s steady progress in brand acceptance, operational excellence, and responsible business practices reflects a culture of continuous improvement, innovation, and responsiveness to consumer needs. These efforts, he said, have further strengthened Rite Foods’ position as a proudly Nigerian brand with growing relevance and impact across the country.
Mr Adegunwa reaffirmed that Rite Foods will continue to invest in research and development, efficient production processes, and initiatives that support communities, while maintaining quality standards across its product portfolio.
“As the year comes to a close, Rite Foods Limited wishes Nigerians a joyful Christmas celebration and a prosperous New Year filled with peace, progress, and shared success.”
By Adedapo Adesanya
The Naira closed the pre-Christmas trading day positive after it gained N6.61 or 0.46 per cent against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, December 24, trading at N1,443.38/$1 compared with the previous day’s N1,449.99/$1.
Equally, the Naira appreciated against the Pound Sterling in the same market segment by N1.30 to close at N1,949.57/£1 versus Tuesday’s closing price of N1,956.03/£1 and gained N2.94 on the Euro to finish at N1,701.31/€1 compared with the preceding day’s N1,707.65/€1.
At the parallel market, the local currency maintained stability against the greenback yesterday at N1,485/$1 and also traded flat at the GTBank forex counter at N1,465/$1.
Further support came as the Central Bank of Nigeria (CBN) funded international payments with additional $150 million sales to banks and authorised dealers at the official window.
This helped eased pressure on the local currency, reflecting a steep increase in imports. Market participants saw a sequence of exchange rate swings amidst limited FX inflows.
Last week, the apex bank led the pack in terms of FX supply into the market as total inflows fell by about 50 per cent week on week from $1.46 billion in the previous week.
Foreign portfolio investors’ inflows ranked behind exporters and the CBN supply, but there was support from non-bank corporate Dollar volume.
As for the cryptocurrency market, it witnessed a slight recovery as tokens struggled to attract either risk-on enthusiasm or defensive flows.
The inertia follows a sharp reversal earlier in the quarter. A heavy selloff in October pulled Bitcoin and other coins down from record levels, leaving BTC roughly down by 30 per cent since that period and on track for its weakest quarterly performance since the second quarter of 2022. But on Wednesday, its value went up by 0.9 per cent to $87,727.35.
Further, Ripple (XRP) appreciated by 1.7 per cent to $1.87, Cardano (ADA) expanded by 1.2 per cent to $0.3602, Dogecoin (DOGE) grew by 1.1 per cent to $0.1282, Litecoin (LTC) also increased by 1.1 per cent to $76.57, Solana (SOL) soared by 1.0 per cent to $122.31, Binance Coin (BNB) rose by 0.6 per cent to $842.37, and Ethereum (ETH) added 0.3 per cent to finish at $2,938.83, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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