UAC’s Dividend Payout Shrinks Over N2.01bn Loss

Kayode Tokede

UAC of Nigeria Plc might not pay shareholders’ dividend in 2022 financial year over its N2.01billion loss after tax in nine months ended September 30, 2022 from N563.12million profit after tax reported in corresponding nine months of 2021.

The leading diversified company, operating in the Food and Beverage, Real Estate, Paint and Logistics sectors of the economy also announced N1.1 billion loss before tax in nine months of 2022 from N1.38billion reported in nine months of 2021.

The losses in nine months of 2022 can be attributable to severe operating challenges amid hike in inflation rate.

Over the years, UAC of Nigeria maintained mixed performance in dividend payout to shareholders.

For instance, the company in 2021 reported N2.59 billion profit and the directors recommended the payment of an ordinary dividend of N0.65 kobo per ordinary share to members

In 2020, it reported N3.93billion profit from a loss of N9.26billion in 2019 and paid shareholders a dividend of N1.20 (N3.46billion) as against N0.10 dividend in 2019 (N288million) paid to shareholders in 2019.

Although, it reported 9.02per cent increase in revenue to N77.8 billion in nine months of 2022 as against N71.37 billion in nine months of 2021, cost of sales, operating expenses and finance cost battered the Group results in the period under review.

The Group reported N65.5billion cost of sales in nine months of 2022, representing an increase of about 11 per cent to N59.01billion reported in nine months of 2021.

In the period under review, gross profit stood at N12.32billion from N12.36billion, representing a decline of 0.3 per cent, attributable to significant increase in cost of sales.

Consequently, gross profit margin dropped to 84.2 per cent in nine months of 2022 from 82.68per cent in nine months of 2021.

Further breakdown of UAC of Nigeria profit and loss revealed a   N1.17billion “Other operating income” in nine months of 2022 from N395.65million in nine months of 2021.

In terms of total Operating Expenses (OPEX), the Group reported N12.68billion in nine months of 2022, representing an increase of 21 per cent from N10.5billion in nine months of 2021.

The breakdown of OPEX showed a 36.4er cent increase in selling and distribution expenses to N6.2billion in nine months of 2022 from N4.54billion in nine months of 2021 as Administrative expenses rose by 8.8 per cent to N6.48billion from N5.96billion reported in corresponding period of 2021.

The proportion of OPEX/Revenue closed nine months of 2022 at 16.3per cent from 14.7per cent in nine months of 2021.

From the loss and profit figures, the group announced N730.77million finance income in nine months of 2022, representing a decline of 20.6 per cent from N920.8million in nine months of 2021 as finance cost grew significantly by 119.9per cent to N2.55billion in nine months of 2022 from N1.16billion in nine months of 2021.

The group recognised higher finance costs on account of increased short-term borrowings in the Animal Feeds and Other Edibles segment to support deliberate efforts to build inventory as well as rising interest rates.

Loss per share from continuing operations for nine months of 2022 was N0.46 kobo, compared to the earnings per share from continuing operations of N0.03 kobo in nine months of 2021.

Total assets on a decline performance

UAC of Nigeria recorded 1.9 per cent increase in total assets to N100.82billion as at September 30, 2022 from N98.93billion reported in full year ended December 31, 2021.

As UAC of Nigeria reported 7.3 per cent increase in total non-current assets to N45.09 billion as at September from N42billion in full year ended December 31, 2021 as total current assets closed September 30, 2022 at N55.19billion, about 2.07 per cent decline from N56.35billion reported in 2021 FY.

From the financial position, the Group reported nearly eight per cent decline in total equity to N46.98billion as at September 30, 2022 from N50.94billion reported in 2021.

The decline in total equity was driven primarily by 11 per cent decline in retained earnings to N26.72billion  in nine months of 2022 from N29.89billion reported in 2021 financial year.