UAC blames maize, soybean price slump for quarterly loss

Nigerian conglomerate UAC of Nigeria Plc (UAC) reported a ₦703 million pre-tax loss for the third quarter ended Sept. 30, reversing a ₦5.9 billion profit a year earlier, as a disastrous performance by its animal feeds segment and one-off acquisition expenses overshadowed gains in its other consumer-facing businesses.

The loss pushed the company to a ₦2 billion total loss for the quarter. UAC said results were weighed by ₦2.3 billion in transaction costs related to its acquisition of C.H.I. Limited (Chivita | Hollandia), completed in October.

The Animal Feeds and Edibles division was the main drag, with revenue plunging 25% year-on-year to ₦21.4 billion, and the segment swinging from a ₦3 billion operating profit to a ₦570 million operating loss.

The downturn was driven by a collapse in agricultural commodity prices, leaving UAC holding high-cost maize and soybeans inventory purchased at ₦404/kg and ₦1,077/kg respectively, while current market prices have fallen to ₦388/kg and ₦620/kg.

The mismatch forced the company to cut feed prices to stay competitive, compressing margins and resulting in a ₦1.9 billion loss before tax for the segment – a stark reversal from a ₦2 billion profit in Q3 2024.

Acquisition Costs Mask Underlying Profit

Excluding exceptional costs and a prior-year FX gain, underlying profit before tax fell 69% to ₦1.6 billion, from ₦5.1 billion in Q3 2024. Net finance costs deteriorated to ₦2.1 billion, versus a small income last year, reflecting higher borrowing rates — particularly within the feed business.

Group revenue slipped 1.5% to ₦49.2 billion, as the Animal Feeds slump offset strong growth in Paints (+27%), Packaged Food and Beverages (+25%), and Quick Service Restaurants (+19%). Operating profit dropped to ₦824 million from ₦5.6 billion, reflecting weaker margins and rising operating expenses amid inflationary pressures.

The Packaged Food and Beverages segment posted a 25% rise in revenue to ₦17 billion, while Paints gained 27% to ₦10.2 billion, both delivering improved profitability.

UAC completed its 100% acquisition of C.H.I. Limited in early October, adding the Chivita and Hollandia brands to its portfolio. Group Managing Director Fola Aiyesimoju said the acquisition and broader shift toward branded food and beverage products should “help offset volatility in agricultural segments.”

For the first nine months of 2025, UAC’s revenue climbed 20% to ₦159.6 billion, while pre-tax profit halved to ₦10.4 billion.

Founded in 1879, UAC — one of Nigeria’s oldest conglomerates — restructured into a lean holding company in 2018. It now operates across four segments: Animal Feeds and Edibles, Paints, Quick Service Restaurants, and Packaged Food and Beverages.