April 29, 2026/CSL Update

UAC of Nigeria Plc (UACN) released its Q1 2026 financial statement, posting a 241.5% year-on-year (y/y) Revenue growth to ₦191.2 billion (Q1 2025: ₦56.0bn), driven by the consolidation impact of the CHI acquisition, and sales growth in its Packaged Food & Beverages and Paints segment.

Financial Highlights:

• Revenue: +241.5% y/y to ₦191.2 billion
• Cost of Sales: +226.7% y/y to ₦136.4 billion
• OPEX: +229.6% y/y to ₦26.9 billion
• EBITDA: +333.9% y/y to ₦34.8 billion
• Operating Profit: +315.8% y/y to ₦28.4 billion
• Profit After Tax: +311.4% y/y to ₦13.6 billion

Export earnings for UACN in Q1 2026 was ₦554 million compared to nil in Q1 2025. This reflects contributions from the CHI acquisition, first recognized in Q4 2025, and highlights a potentially scalable export revenue stream.

Costs and Margins

Cost of Sales rose 226.7% y/y to ₦136.4bn from ₦41.7bn in Q1 2025. However, cost efficiency improved, with the cost-to-sales ratio declining to 71.3% from 74.5% in Q1 2025. Consequently, Gross Profit increased 284.5% y/y to ₦54.8bn, while gross margin inched up to 28.7% (Q1 2025: 25.5%).

Operating Performance

Operating Expenses (OPEX) rose 229.6% y/y to ₦26.9bn (Q1 2025: ₦8.2bn) driven primarily by higher distribution, selling, and personnel costs associated with business expansion. Despite this rise, the OPEX-to-sales ratio moderated slightly to 14.1% (Q1 2025: 14.6%).

EBITDA increased 333.9% y/y to ₦34.8bn (Q1 2025: ₦8.0bn), with the EBITDA margin improving to 18.2% from 14.3% in the prior year. Similarly, Operating Profit (EBIT) rose 315.8% y/y to ₦28.4bn (Q1 2025: ₦6.8bn), with the EBIT margin scaling up by 2.7 percentage points to 14.8% from 12.2%.

Finance and Profitability

Finance Income jumped to ₦8.3bn from ₦1.2bn in Q1 2025, reflecting largely the impact of net foreign exchange gains to the tune of ₦6.8bn. Also, Finance Costs surged 350.0% y/y to ₦14.8bn, driven by borrowings undertaken to fund the acquisition. As a result, the company recorded a Net Finance Cost of ₦6.5bn, compared to ₦2.1bn in Q1 2025.

Overall, Profit Before Tax (PBT) surged 348.0% y/y to ₦22.6bn (Q1 2025: ₦5.0bn) with PBT margin settling at 11.8% versus 9.0% in Q1 2025. Also, Profit After Tax (PAT) for UACN scaled by 311.4% y/y to ₦13.6bn (Q1 2025: ₦3.3bn) with net margin rising to 7.1% (Q1 2025: 5.9%).

Outlook & Recommendation

UACN’s underlying fundamentals remain robust. The acquisition of CHI Limited materially enhances the company’s scale, brand portfolio, and market presence, positioning it for sustained medium-term growth in the food and beverage segment.

We have a BUY rating on the stock, with a Target Price of ₦117.18/s (current price: ₦150.00/s). Our estimates are currently being reviewed

Stock Rating: BUY | Target Price: ₦117.18/share (Our estimates are currently being reviewed)

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