UAC Profit Multiplies Fourfold To N14bn In Q1 On Chi Acquisition

The benefits of UAC of Nigeria’s acquisition of C.H.I. Limited last year are already becoming evident, as the conglomerate’s group profit more than quadrupled year-on-year to N13.6 billion at the close of the first quarter of 2026.

Stakeholders had been closely watching the company’s management to justify the acquisition, which cost over N15 billion and led to a profit decline from over N16 billion in 2024 to N9.9 billion in 2025. Early progress toward post-acquisition objectives has driven sales growth, widened margins, and significantly boosted profit, offering encouragement to management and investors alike.

UAC’s interim financial report for Q1 2026 shows how the company leveraged increased margins and rapidly growing sales revenue to engineer a major rebound in its operating performance.

“We are encouraged by early progress but cognizant of the work that lies ahead,” said Fola Aiyesimoju, Group Managing Director, UAC of Nigeria, in his comments on the Q1 results.Africans & Diaspora

UAC completed the acquisition of C.H.I Limited in October 2025, sparking sales revenue growth since then. The final quarter of 2025 contributed N183.8 billion in sales—54 per cent of the group’s full-year turnover of N340.5 billion.

In Q1 2026, group sales revenue surged nearly three and a half times year-on-year to exceed N191 billion, driven by the consolidation of C.H.I Limited and robust performance in the food, beverages, and paints segments.

With this rapid sales growth, UAC is poised to surpass the previous year’s revenue by the half-year mark, positioning itself as one of the most promising operators in terms of profit delivery.

Production costs, post-consolidation, also rose sharply—more than tripling year-on-year to N136.4 billion. However, this still allowed gross profit margin to improve from 25.5 per cent to 28.7 per cent over the review period.

Gross profit leapt 284.5 per cent year-on-year to N54.8 billion, outpacing the 241.5 per cent increase in sales. However, selling and distribution expenses rose even faster, multiplying more than four and a half times to N15.6 billion in Q1, driven largely by higher energy costs. This expense consumed 28.4 per cent of gross profit, up from 23.7 per cent in the same quarter of 2025—a trend likely to continue into Q2.

Administrative expenses rose at a slower pace, up 138.8 percent to just over N11 billion, moderating the overall increase in total operating expenses to 231 per cent, or nearly N27 billion for the quarter. Consequently, the operating cost margin edged down from 14.5 per cent to 14 per cent.

The combination of higher gross profit margin and a lower operating cost margin powered UAC’s profit surge in Q1. Operating profit soared more than four times to N28.4 billion.

The company also achieved cost savings in financing operations, further strengthening profit capacity. Finance income jumped from N1.2 billion to N8.3 billion, offsetting a four and a half times increase in finance expenses to N14.8 billion. Net finance costs grew by 210.8 percent to N6.5 billion but claimed a reduced share of operating profit—less than 23 percent, compared to 30.6 per cent a year earlier.

Strong revenue growth and margin gains at all operating levels underpinned UAC of Nigeria’s outstanding profit performance in the first quarter. Pre-tax profit rose by 348 per cent year-on-year to N22.6 billion, while profit after tax jumped 311.4 per cent to N13.6 billion.Africans & Diaspora

Earnings per share for Q1 stood at N4.49, compared to N1.06 in the same period last year