April 30, 2024/CSL Research
In its 2024 unaudited financial results, UAC of Nigeria Plc’s (UACN) Revenue increased to N40.56bn (+64.7% y/y) from N24.60bn in Q1 2023. On a q/q basis, the Revenue was up by 4.0% from N39.00bn in Q4 2023. The uptick in the company’s Revenue was largely buoyed by the rise in Revenue from its Animal Feeds & Other Edibles, Paints and Packaged Foods & Beverages to N19.17bn (+34.1% y/y), N8.51bn (+114.2% y/y) and N12.01bn (+124.8% y/y) from N14.29bn, N3.97bn and N5.35bn in Q1 2023 respectively. However, Revenue from the Quick Service Restaurants (QSR) and Other Revenue declined to N819m (-13.0% y/y) and N48m (-33.7% y/y) from N942m and N72m in Q1 2023 accordingly.
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The company’s Cost of Sales (adjusted for depreciation) was up 48.2% y/y to N30.82bn in Q1 2024 from N20.80bn in Q1 2023. Consequently, UACN reported Gross Profit of N9.73bn (+154.9% y/y) from N3.82bn in Q1 2023 leading to a Gross Profit Margin of 24.0% in the period compared with 15.5% in Q1 2023. UACN’s total Operating Expense (adjusted for depreciation) increased by 30.9% y/y to N5.58bn in Q1 2024 from N3.84bn in Q1 2023 with Administrative Expenses (ex-depreciation) contributing the most, increasing to N3.25bn (+59.7% y/y) in Q1 2024 from N2.03bn in Q1 2023. Selling and Distribution Expenses (adjusted for depreciation) rose to N2.33bn (+28.7% y/y) from N1.81bn in Q1 2023. However, the company’s total OPEX margin dropped by 1.86ppts to 13.7% in Q1 2024 from 15.6% in Q1 2023.
UACN reported Impairment Loss on Assets of N61m in Q1 2024 compared with a gain of N12m in Q1 2023. The company’s Depreciation and Amortization increased 21.1% y/y to N1.03bn from N854m in Q1 2023. Its share of profit from associates grew to N493m in the period from a loss of N5m in Q1 2023. Therefore, its Operating Profit came to N3.55bn in Q1 2024 compared with a Loss of N871m in the prior year. Its Other Income increased to N340m (+105.2% y/y) from N166m in Q1 2023 bringing its EBIT to N3.89bn (+652.24% y/y) in Q1 2024 compared with a Loss of N705m in Q1 2023.
Its Finance Income rose significantly to N6.51bn in Q1 2024 from N430m in Q1 2023 driven by significant FX gains of N5.92bn made in the quarter. On the flip side, its Finance Cost was also up 107.5% y/y to N1.37bn in Q1 2024 from N662m in Q1 2023. Overall, its Net Finance Income rose significantly to N5.14bn in Q1 2024 from a Loss of N232m in Q1 2024.
The Share Profit from its Associates was N493m in Q1 2024 compared with a Loss of N5m in Q1 2023. Overall UACN reported Profit Before Tax of N9.03bn compared with a Pre-tax Loss of N937m in Q1 2023. The exclusion of an Income Tax of N3.11bn in Q1 2024 brought its Net Profit to N5.92bn compared with a Loss After Tax of N1.16bn in Q1 2023.
We have a Buy rating on the stock with a target price of N19.42/share. Current Price: N13.50/s.
