THAT the nation’s economy is in recession is no longer news; what is coming across as newsworthy is how players in the economy are battling the headwinds to remain afloat while continuing to deliver the value they’ve been know for over the years. Data from the National Bureau of Statistics (NBS), showed that national GDP in the second quarter of this year declined by -2.06 per cent, while inflation rose to 17.9 per cent in September from 17.6 per cent in August.
Prices of foodstuffs hit the roof, rising to as much as 16.6 per cent in September. Inevitably, manufacturing concerns have been worst hit, with the prices of inputs skyrocketing while scarcity of forex, of a type probably not seen before compounded the situation.
The gloomy economic indicators notwithstanding, UAC of Nigeria PLC has posted inspiring unaudited results for the nine months ended 30 September 2016. It defied all the challenges of a recessed economy to post five per cent year-on-year growth for the period, recording a profit after tax of N4.3 billion, up by 42%, compared to the N3.1 billion recorded in the same period last year.
Larry Ettah, Group Managing Director & CEO of UAC of Nigeria PLC remarked: “Our performance in the nine months to September 2016 demonstrates the resilience of our business and the effectiveness of our strategy in a rather difficult operating environment. Markets remained soft with declining purchasing power, especially in our real estate and paint categories. Forex scarcity/rate volatility and input material shortages are leading to frequent and significant cost increases and production disruptions.
UACN Plc reported a turnover of N57.7 billion, up 5% (N55 billion September 2015); Gross profit of N12.5 billion, up 2% (N12.2 billion September 2015); Other income of N1.8 billion, up 92% (N933 million September 2015); Profit Before Tax of N6.3 billion, up 27% (N4.95 billion September 2015) and Profit After Tax of N4.3 billion, up 42% (N3.1 billion September 2015).
Key subsidiary performances were also thrilling. UPDC PLC, its real estate division recorded Profit Before Tax of N133 million (Loss of 110 million September 2015).
UAC Restaurants Limited recorded Profit Before Tax of N3.5 million (Loss of N80.2 million September 2015) while UAC Foods Limited (foods, ice cream, fruit drinks and spring water) recorded Profit Before Tax of N1 billion, up 16% (N868 million September 2015).
Grand Cereals Limited (animal feed, cereal meal and edible oil) recorded Profit Before Tax of N1.75 billion, up 48% (N1.18 billion September 2015) while MDS Logistics Limited (Logistics) recorded Profit Before Tax of N1.1 billion, up 42% (N788 million September 2015); CAP PLC (Paints) recorded Profit Before Tax of N1.5 billion, down 12% (N1.7 billion September 2015); Livestock Feeds PLC (animal feed) recorded Profit Before Tax of N157.9 million, down 21% (N200.8 million September 2015) while PortlandPaints and Products Nigeria PLC (Paints) recorded a Loss Before Tax of N31.4 million (Loss of N78.1 million September 2015)
According to an analyst: “UACN’s net operating cash flow improved significantly in Q316 to NGN3.3bn vs. NGN2.0bn due to a strong operating profit and better working capital management during the quarter; not surprising as this is generally a seasonal trend at the company. Gross debt is slightly lower QoQ, reflecting the repayment of commercial bank loans during the quarter. However, management highlights that the commercial papers raised earlier in the year have now been refinanced, having matured in October.”