UAC of Nigeria, UACN, Plc has reported Profit after Tax of ₦3.8 billion for the full year period ended December 31, 2020, according to the unaudited results of the company.
This represents a 27.8 percent year-on-year decrease in profit against ₦5.3 billion at the end of 2019.
Total profit for the period was ₦4.3 billion in 2020, a reversal from the ₦9.3 billion loss reported in FY 2019.
Revenue in 2020 increased three percent YoY to N81.6 billion driven by sales growth in the Animal Feeds and Other Edibles segment (+4.6 percent YoY), the Packaged Food & Beverages segment (1.8 percent) and the Quick Service Restaurant Segment (1.9 percent).
UACN said these segments were regarded as essential services during the period of stringent restrictions to movement of people and goods to curtail the spread of COVID-19.
Gross profit in 2020 declined 5.5 percent YoY to N15.7 billion as a result of limited sales during the strictest phase of the lockdown (April and May), higher input costs, and distribution expenses.
Operating Profit was N3.6 billion in FY 2020 compared to N5.7 billion in the previous year.
Underlying FY 2020 EBIT declined 24.6 percent YoY to N3.6 billion in 2020 versus N4.8 billion in 2019 due to adjustment for non-recurring income in 2019 from the sale of non-core real estate assets (N631 million) and the writeback of statute barred unclaimed dividend (N206 million),
Underlying Profit before Tax was 19 percent lower YoY at N5.4 billion in FY 2020 on account of lower operating profit and steep decline in net finance income (-69.0 percent YoY) because of lower investment income yields compared to the prior year.
The decline in net finance income was offset by the share of profit of associates of N1.2 billion earned from MDS and UPDC, largely attributable to a non-cash, mark to market increase in the fair value of UPDC REIT.
Profit after Tax from continuing operations was ₦3.8 billion, down 27.8 per cent YoY against N5.3 billion in FY 2019.
Earnings per share for FY 2020 was 106 kobo, up from negative 183 kobo in FY 2019.
Commenting on the performance, the Group Managing Director, Fola Aiyesimoju, said the operating performance of the company was negatively impacted by disruptions caused COVID-19 and ENDSARS protests, as well as, input cost escalation.
According to him, UAC received 649 million units of UPDC Real Estate Investment Trust valued at N3.6 billion in December as part of the partial exit from UPDC.
This, he says, is in addition to the N6.6 billion received in half-year 2020 for the sale of a 51 per cent stake in UPDC.
He said, “We focused on executing our strategy, implementing initiatives relating to UPDC, significantly reducing leverage and increasing cash, strengthening management, and driving profitability.
“Our efforts resulted in net income of N4.3 billion in 2020. We benefited from N1.2 billion in nonrecurring gains from investments in associates, MDS Logistics Limited and UACN Property Development Company Plc.
“In the fourth quarter, our businesses rebounded and profit after tax increased 136 per cent to N2.4 billion (N1.4 billion, adjusting for non-recurring items) from N1.0 billion in 2019, supported by cost management initiatives that reduced operating expenses by N1.4 billion (30 per cent).”