The consolidation of C.H.I. Limited and improved contributions from its packaged food, beverages and paints businesses have strengthened UAC of Nigeria Plc’s earnings, pushing its profit before tax up by 262.5% in the first nine months of 2026.
The conglomerate’s profit before tax rose to N37.69 billion for the nine months ended September 30, 2026, from N10.40 billion recorded in the corresponding period of 2025. Profit after tax also climbed by 307.1% to N21.91 billion from N5.38 billion, while earnings per share increased to 722 kobo from 179 kobo.
Revenue growth was equally significant, rising by 227.7% to N523.00 billion from N159.58 billion a year earlier, according to the company’s unaudited financial results released on October 30, 2026.
UAC also returned to quarterly profitability, posting a profit before tax of N3.25 billion in the third quarter, compared with a loss before tax of N703 million in the corresponding period of 2025.
Third-quarter revenue increased by 221.4% to N158.03 billion from N49.17 billion, reflecting the expanded contribution of its packaged food and beverages operations.
The results highlight the impact of UAC’s acquisition-led expansion, although performance across its business segments remained mixed, with declines recorded in the edibles and feed and quick-service restaurant divisions.
Management Highlights Growth and Debt Reduction
Commenting on the performance, Group Managing Director, Fola Aiyesimoju, attributed the improvement to the group’s Packaged Food and Beverages and Paints businesses.
He also pointed to stronger cash generation, supported by the release of working capital, while reaffirming management’s commitment to completing announced divestments and reducing the group’s debt burden.
The company’s financial results showed that gross profit rose by 262.1% to N142.55 billion from N39.37 billion, while operating profit, measured by earnings before interest and tax (EBIT), increased by 343.7% to N59.54 billion from N13.42 billion.
Gross profit margin improved to 27.3% from 24.7%, indicating that the group retained a larger proportion of revenue after accounting for the cost of sales.
The improvement came despite an increase in the cost of sales to N380.45 billion from N120.21 billion.
Operating expenses rose to N86.54 billion from N27.98 billion, comprising selling and distribution expenses of N50.78 billion and administrative expenses of N35.75 billion.
However, operating expenses declined as a proportion of revenue to 16.5% from 17.5%, suggesting improved cost absorption as the business expanded.
Consequently, operating profit margin increased to 11.4% from 8.4%, reflecting stronger operating performance during the review period.
Packaged Food and Beverages Drives Revenue Growth
A closer examination of the group’s segmental performance shows that Packaged Food and Beverages was the principal driver of revenue growth during the nine-month period.
The segment generated N436.20 billion in revenue, compared with N56.94 billion in the corresponding period of 2025, representing an increase of 666.1%.
Its contribution accounted for approximately 83.4% of the group’s total revenue, with the sharp increase largely reflecting the consolidation of C.H.I. Limited, which UAC acquired in October 2025, alongside growth recorded by UAC Foods Limited.
The acquisition significantly expanded the group’s revenue base and strengthened the contribution of its consumer food and beverage operations to overall performance.
The Paints business also recorded growth, with revenue increasing by 11.3% to N33.69 billion from N30.27 billion. The segment contributed approximately 6.4% of group revenue.
Management attributed the division’s third-quarter growth to a 21% increase in sales volumes, supported by demand for its decorative paint products and the relaunch of Sandtex Select in August 2026.
However, the group’s other businesses recorded weaker performances.
Revenue from the Edibles and Feed segment declined by 27.4% to N51.30 billion from N70.64 billion, reflecting weaker performance in agricultural commodities.
Similarly, revenue from Quick Service Restaurants fell by 3.4% to N1.86 billion from N1.92 billion. Nevertheless, the segment recorded a 3.6% increase in third-quarter revenue, supported by improved sales across its stores.
The figures indicate that the group’s strong overall revenue growth was concentrated in Packaged Food and Beverages, while the performance of its other business segments remained uneven.
Higher Finance Costs Weigh on Earnings
Despite the improvement in operating performance, rising financing costs remained a major pressure on the group’s earnings.
Net finance costs increased to N23.94 billion from N5.74 billion in the corresponding period of 2025, with management attributing the higher burden to increased borrowings following the acquisition of C.H.I. Limited.
The elevated finance costs absorbed a substantial portion of the group’s operating profit, limiting the extent to which improved operations translated into profit before tax.
Nevertheless, UAC sustained strong growth in its bottom line, with profit before tax rising to N37.69 billion and profit after tax reaching N21.91 billion.
The performance suggests that the expansion in revenue and operating profitability more than offset the pressure from higher financing expenses during the nine-month period.
Operating Cash Flow Strengthens
UAC also recorded a substantial improvement in cash generation, with net cash generated from operating activities rising to N113.16 billion from N27.17 billion in the corresponding period of 2025.
According to management, free cash flow reached N98.44 billion, supported by higher operating profit and a N33.4 billion release of working capital.
The stronger cash flow performance provides additional support for the group's debt-reduction efforts, although cash and cash equivalents declined during the period.
As of September 30, 2026, cash and cash equivalents stood at N31.54 billion, down 38.0% from N50.91 billion recorded at the end of December 2025.
The decline occurred alongside reductions in inventories and receivables, reflecting changes in the group’s working capital position during the period.
Debt Falls as Balance Sheet Contracts
UAC’s total assets declined by 13.4% to N516.89 billion as of September 30, 2026, from N597.06 billion at the end of 2025.
The reduction was largely associated with lower inventories, receivables and cash balances.
Inventories fell to N153.33 billion from N214.53 billion, while current trade and other receivables declined to N18.78 billion from N25.67 billion.
On the liabilities side, total liabilities decreased by 15.4% to N446.04 billion from N527.29 billion.
Shareholders’ funds, however, increased by 1.5% to N70.85 billion from N69.77 billion, providing a modest improvement in the group’s equity position.
Total borrowings declined by 23.8% to N262.63 billion from N344.81 billion, comprising current debt of N102.97 billion and non-current debt of N159.66 billion.
The reduction reflected borrowing repayments of N235.54 billion, compared with new borrowing proceeds of N173.22 billion. An exchange gain of N11.28 billion and the reclassification of N7.93 billion in borrowings to liabilities held for sale also contributed to the movement.
Consequently, net debt declined by N62.8 billion to approximately N231 billion.
The group’s net debt-to-last-twelve-months EBITDA ratio also improved to 2.2 times from 5.9 times at the end of 2025, indicating a substantial reduction in leverage relative to its earnings base.
Although finance costs remain elevated, the reduction in borrowings and improvement in the leverage ratio point to progress in management’s efforts to strengthen the balance sheet.
Divestment Plans Advance
As part of its broader portfolio and debt-management strategy, UAC disclosed agreements to sell its 43% stake in DP World Logistics Limited and its 73.29% holding in Livestock Feeds Plc.
Both transactions remain subject to regulatory approval, while the investments have been classified as held for sale in the company’s financial statements.
The proposed disposals form part of management’s stated focus on completing announced divestments and reducing debt.
Successful completion of the transactions could further reshape the group’s business portfolio and support its capital-allocation priorities, although the ultimate impact will depend on the terms and completion of the sales.
Shares Remain Flat After Results
On the Nigerian Exchange (NGX), UAC of Nigeria shares closed at N181.00 on Friday, October 30, 2026, unchanged from the previous session’s closing price.
The stock has gained 98.9% year-to-date, rising from its opening price of N91.00 at the beginning of 2026.
The performance placed UAC 23rd on the NGX in terms of year-to-date share price appreciation.
Market data also showed that the shares traded at N181.00 throughout the last 10 trading sessions covered, indicating a period of price stability despite the release of the company’s nine-month results.
Overall, UAC’s latest financial performance reflects a combination of acquisition-driven revenue expansion, stronger operating profitability, improved cash generation and a substantial reduction in debt.
However, the group’s reliance on Packaged Food and Beverages for the bulk of its revenue growth, the weaker performance of some business segments and the increase in finance costs remain important factors to watch as management pursues further portfolio adjustments and balance sheet improvements.