UPDC PLC experienced a remarkable financial turnaround in 2024, reporting a substantial surge in profitability and revenue. The company’s financial performance for the year ended December 31, 2024, showcased a 509% increase in profit after tax, reaching N1.35 billion compared to N221.51 million in 2023. This impressive growth was primarily driven by a significant 123% rise in revenue, which climbed to N11.93 billion from N5.34 billion in the preceding year. This robust revenue performance can be attributed to heightened sales activity and enhanced operational efficiencies implemented throughout the year. While costs also increased, the company’s ability to expand its revenue base at a faster pace contributed significantly to the overall profit growth.
A deeper dive into the financial statements reveals a ripple effect of this increased revenue throughout UPDC’s operations. The cost of sales, although rising to N7.65 billion from N3.44 billion in 2023, was outpaced by the revenue growth. Consequently, the gross profit more than doubled, achieving a 125% increase to N4.28 billion compared to N1.90 billion in the previous year. This indicates improved margins and underscores the company’s ability to manage production and sales costs effectively despite the overall increase in expenses. Selling and distribution expenses and administrative expenses also rose, reaching N303.63 million and N2.51 billion respectively, reflecting increased business activity and potentially investments in growth initiatives. However, the robust growth in gross profit helped absorb these increased operational costs, leading to a significant 198% increase in operating profit, which reached N1.68 billion.
UPDC’s improved financial standing was further bolstered by positive developments in its financial activities. Finance income increased noticeably to N538.18 million in 2024 from N239.53 million in 2023, possibly indicating successful investment strategies or improved interest income. Simultaneously, finance costs decreased slightly to N397.83 million from N423.19 million, further contributing to the overall profitability. These positive developments in both operational and financial performance culminated in a substantial rise in profit before taxation, which surged by 379% to N1.82 billion. Ultimately, this strong financial performance translated to the impressive 509% increase in net profit for the year.
Despite the remarkable growth in net profit, the company experienced a decline in other comprehensive income. This was largely attributed to a decrease in net changes in the fair value of financial assets, which dropped to N186.78 million compared to a gain of N453.61 million in 2023. This 41% decline in other comprehensive income lowered the total comprehensive income to N1.16 billion, representing a still commendable 72% growth from the previous year’s N675.11 million. Of this total comprehensive income, equity holders of the parent company benefited from N730.47 million, highlighting the positive impact of the year’s performance on shareholder value.
The company’s balance sheet also reflects this improved financial health. Total assets grew by 25% to N24.63 billion, up from N19.66 billion in 2023. This asset growth was underpinned by a substantial increase in cash and cash equivalents, which jumped to N11.47 billion compared to N4.92 billion in the previous year. This significant increase in liquidity provides UPDC with greater financial flexibility for future investments and operational needs. The company’s equity also grew by 13% to N9.99 billion, further strengthening its financial position. Simultaneously, liabilities also increased to N14.63 billion from N10.83 billion, likely reflecting increased business activity and potential financing of growth initiatives.
While the overall 2024 performance paints a picture of significant financial recovery and growth, it’s worth noting that the company reported a loss of N115.9 million for the first half of 2024. Although this represents an 11.59% improvement compared to the N131.1 million loss in the corresponding period of 2023, it highlights the volatile nature of the business and underscores the importance of the second half performance in driving the overall full-year results. The remarkable turnaround in the latter half of the year suggests strategic initiatives and operational improvements that were implemented and bore fruit in the subsequent quarters. This significant shift in performance between the first and second halves warrants further investigation to understand the contributing factors and ensure the sustainability of this positive momentum.
