UAC of Nigeria Plc’s financial performance for the first half of 2025 presents a mixed picture, characterized by robust top-line growth but a significant decline in profitability. While the company achieved impressive revenue growth and improved operational efficiency, a substantial swing in net finance income from a positive N7.82 billion in H1 2024 to a negative N3.62 billion in H1 2025 significantly impacted the bottom line. This reversal, driven by a combination of lower investment returns and increased finance costs, overshadowed the positive contributions from core operations and resulted in a 22.9% decrease in profit after tax, settling at N7.36 billion compared to N9.54 billion in the same period of the previous year.
The strong revenue performance, a 32.6% increase to N110.41 billion from N83.25 billion in H1 2024, underscores the company’s effective sales strategies and robust market demand for its products and services. This top-line growth also translated into a 51% increase in gross profit, reaching N28.26 billion, driven by higher sales volumes across key subsidiaries. Furthermore, operating profit saw a remarkable 89% year-on-year growth, reaching N12.59 billion, demonstrating the company’s enhanced operational efficiency and increased contributions from associates. The share of profit from equity-accounted investees also witnessed a substantial jump to N2.13 billion from N475.37 million in H1 2024, further highlighting the positive momentum within the company’s investment portfolio.
Despite these operational improvements, the substantial negative impact of the net finance cost eroded the gains made at the operational level. The decline in finance income by 76% to N2.56 billion coupled with the more than doubling of finance costs to N6.18 billion created a significant drag on profitability. This swing suggests a potential shift in the company’s investment strategy or a change in the interest rate environment, leading to increased borrowing costs. The impact of this financial performance is reflected in the 25.7% decrease in profit before tax, falling to N11.10 billion from N14.95 billion. While income tax expenses were lower at N3.74 billion compared to N5.41 billion in H1 2024, it was not enough to offset the impact of the reduced finance income and increased finance costs.
Consequently, the profit attributable to shareholders also experienced a decline, falling to N6.96 billion from N8.91 billion in H1 2024. This decline directly impacts shareholder returns, as evidenced by the drop in earnings per share from 304 kobo to 238 kobo, a decrease of 21.7%. This emphasizes the importance of managing finance costs and optimizing investment returns for sustained shareholder value creation. The company’s financial health, while impacted by the reduced profitability, still shows strength in its balance sheet.
Examining the balance sheet, UAC of Nigeria Plc maintained a stable financial position with a slight increase in total assets to N161.49 billion at the end of June 2025, compared to N157.73 billion at the end of 2024. This growth is supported by an increase in cash and cash equivalents to N46.81 billion and a rise in trade and other receivables to N10.18 billion. These figures suggest a healthy liquidity position, which provides the company with the flexibility to navigate challenging economic conditions and pursue strategic investments.
Shareholders’ equity also saw growth, rising to N69.52 billion from N62.74 billion at the end of 2024, indicating a strengthening of the company’s financial foundation. The growth in retained earnings to N53.17 billion further reflects the accumulation of profits over time, despite the dip in profitability in the current period. This robust equity position provides a cushion against future uncertainties and demonstrates the company’s long-term financial viability. Going forward, UAC of Nigeria Plc will need to address the factors contributing to the decline in net finance income while capitalizing on the positive momentum in its core operations to ensure sustainable profitability and enhance shareholder returns.
