……Announces agreement to acquire CHI Limited

July 30, 2025/CSL Research

Financial Highlights:

• Revenue: +32.6% y/y to ₦110.41Bn
• Cost of Sales: +27.3% y/y to ₦82.15Bn
• OPEX: +32.1% y/y to ₦17.04Bn
• EBITDA: +70.8% y/y to ₦15.06Bn
• Operating Profit: +89.1% y/y to ₦12.59Bn
• Profit After Tax: -22.9% y/y to ₦7.36Bn

In  its H1 2025 results, UAC of Nigeria Plc. (UACN) reported a 32.6% y/y Revenue growth to ₦110.41 billion from ₦83.25 billion in H1 2024 driven mainly by volume growth and price adjustments across core operating segments. The company’s Revenue pared by 2.9% q/q to ₦54.40 billion in Q2 2025 from ₦56.00 billion in Q1 2025. Revenue numbers for the reporting segments in H1 2025 are as follows:

• Edibles & feed: ₦49.07bn, up 27.3% y/y from ₦38.53bn in H1 2024. Contributed 44.44% of total Revenue compared to 46.28% in H1 2024.

• Paints: ₦20.09bn, up 28.7% y/y from ₦15.61bn in H1 2024. Contributed 18.20% to overall Revenue in H1 2025, down from 18.75% in H1 2024.

• Packaged food and beverages: ₦39.83bn, up 44.5% y/y from ₦27.57bn in H1 2024. Contributed 36.08% to Revenue compared to 33.11% in 2024.

• Quick service restaurants (QSR): ₦1.28bn, down 12.2% y/y from ₦1.46bn in H1 2024. Added 1.16% to Revenue, down from 1.75% in H1 2024.

• Others: ₦133 million, up 53.9% y/y from ₦87 million in H1 2024. The segment contributed 0.12% to overall Revenue up from 0.10% in H1 2024.

In addition to broad-based price increases, Revenue growth in the packaged food and beverage segment was supported by volume gains in the snacks and dairies categories. Similarly, in the edibles & feeds and paints segments, both price and volume increases contributed to the overall topline expansion

Stock Rating: Under Review

ACN’s Cost of Sales increased by 27.3% y/y to ₦82.15 billion in H1 2025, up from ₦64.54 billion in H1 2024. This growth was largely driven by a 28.2% y/y increase in inventories of finished goods and work-in-progress, which rose to ₦72.10 billion, compared to ₦56.25 billion in the prior-year period. Despite the rise in costs, the company’s cost-to-sales ratio improved, declining by 3.1 percentage points to 74.4% in H1 2025 from 77.5% in H1 2024. This reflects the positive impact of top-line growth and the successful implementation of cost-saving measures across production lines.

Gross Profit was up 51.0% y/y to ₦28.26bn in H1 2025 from ₦18.71bn in H1 2024 while the Gross Margin increased to 25.6% in the period from 22.5% in 2024. Notably, UACN’s Q2 2025 standalone Gross Margin improved by 0.3 percentage points to 25.7% from 25.4% in Q1 2025, despite the q/q Revenue decline, buoyed by the strong cost efficiency by the company.

UACN’s Total Operating Expenses rose to ₦17.04 billion in H1 2025, up from ₦12.90 billion in H1 2024. Despite the increase in costs, the company recorded strong profitability improvements. EBITDA surged by 70.8% y/y to ₦15.06 billion (H1 2024: ₦8.82 billion), with the EBITDA margin expanding by 3.0 percentage points to 13.6%, from 10.6% in the prior-year period. Operating Profit (EBIT) posted an even stronger
growth of 89.1% y/y, reaching ₦12.59 billion, compared to ₦6.67 billion in H1 2024. As a result, the EBIT margin improved to 11.4%, up from 8.0% in the same period last year.

UACN’s Finance Income for H1 2025 dropped to ₦2.56bn, down from ₦10.66bn in H1 2024, primarily due to the nonrecurrence of the prior period’s foreign exchange (FX) revaluation gain (H1 2024: ₦9.37bn). Meanwhile, Finance Costs increased by 117.0% y/y to ₦6.18bn in H1 2025, up from ₦2.85bn in H1 2024, primarily due to increased long-term and working capital borrowings in the period. Overall, UACN recorded a Net Finance Cost position of ₦3.62bn in H1 2025, compared to a Net Finance Income of ₦7.82bn in H1 2024.

UACN’s Profit Before Tax declined by 25.8% y/y to ₦11.10bn in H1 2025 compared to ₦14.95bn in H1 2024 while Net Profit settled at ₦7.39bn, down 22.9% y/y from ₦9.54bn in H1 2024 after accounting for an income Tax Expense of ₦3.74bn in the period (H1 2024: ₦5.41bn).

We have a target price of N46.34/s for UACN with a BUY recommendation. Current price N73.00/s. Our target price and recommendation are being reviewed. Management announces agreement to acquire CHI Limited.

In another development, UAC of Nigeria Plc. (UACN) has announced that it has entered into an agreement to acquire CHI Limited from The Coca-Cola Company, in a move that significantly strengthens its position in Nigeria’s fast-moving consumer goods (FMCG) sector. The transaction remains subject to regulatory approval.

CHI Limited is a leading player in Nigeria’s food and beverage space, with a diverse product portfolio spanning value-added dairy products, juices, nectars, still drinks, and snacks. Its flagship Hollandia brand is a market leader in the evaporated milk and drinking yoghurt categories, while Chivita holds a dominant position in the fruit juice segment.

Notably, CHI Limited also owns the popular Capri-Sun brand—fruit-flavoured drinks in petite packs with strong appeal among children and young consumers. In addition, the company’s SuperBite and Beefie sausage rolls have gained substantial market traction, emerging as direct competitors to UACN’s own Gala brand.

The acquisition marks a strategic milestone for UACN, positioning the company for greater market penetration and expanded market share across key FMCG categories. It is expected to enhance UACN’s presence in the dairy, juice, and snack markets, while unlocking new growth opportunities through brand consolidation and product innovation.

Further details will be provided as the transaction progresses.

To read full report, click on the link below​​

​​​​​​​UACN H1 2025 Quick Take.pdf​​​​​​​​​​​​​​​​​​​​​

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