UAC hits record revenue as CHI acquisition shrinks profit by 97%

UAC of Nigeria

UAC of Nigeria Plc posted its strongest revenue performance on record in 2025, after completing the full acquisition of CHI Limited. However, heavy one-off acquisition costs sharply eroded earnings, dragging net income down by 97 percent.

The conglomerate’s revenue rose to N343.4 billion in 2025, representing a 74 percent increase from N196.9 billion recorded a year earlier. The expansion was driven largely by the consolidation of CHI Limited into the group’s results, significantly scaling UAC’s consumer goods footprint.

According to the company’s unaudited earnings for the year ended December 2025, revenue from the packaged food and beverages division surged by 252 percent. UAC Foods and CHI Limited jointly generated N204.5 billion, up sharply from N58 billion in 2024, making the segment the group’s largest contributor.

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The strong topline growth flowed through to gross profit, which climbed 64 percent to N76 billion, from N46.3 billion in the previous year. But the earnings momentum was offset by N21.2 billion in acquisition-related costs, booked largely in the final quarter following the completion of the CHI deal.

As a result, net income fell to N504 million, from N16.3 billion in 2024. Profit margin narrowed sharply to 0.1 percent, compared with 8.3 percent a year earlier, underscoring the temporary pressure on profitability.

Commenting on the results, Group Managing Director Folasope Aiyesimoju said the earnings decline masked a much stronger underlying performance.

“Group profitability was impacted by N21 billion one-off acquisition costs. Excluding these, profit before exceptional items increased by 76 percent to N29 billion, from N16 billion in 2024,” he said.

With the transaction now completed, management says its focus has shifted to execution and margin repair.

“Our priority is margin recovery and working capital optimisation, as we execute our value creation plan to deliver stakeholder value consistent with our growth strategy,” Aiyesimoju added.

Operating expenses rose sharply during the year, reflecting the cost of integrating CHI Limited. Total operating expenses climbed 90 percent to N58.1 billion, from N30.6 billion in 2024.

Notably, N30.1 billion of those costs were incurred in the fourth quarter alone, when the acquisition was finalised. In Q4 2025, the inclusion of three months of CHI’s operations lifted quarterly revenue by 62 percent year-on-year to N183.8 billion, highlighting the earnings potential of the enlarged portfolio.

However, operating profit for the quarter declined to N8.2 billion, from N12.2 billion in Q4 2024. Excluding acquisition costs, operating profit would have risen to N20.3 billion, a 66 percent increase, according to the company.

Beyond acquisition costs, UAC’s bottom line was further weighed down by weaker performance in its edibles and feeds business, which posted a net loss of N7.7 billion in 2025, compared with a N4.8 billion loss a year earlier. The segment was hit by declining agricultural commodity prices and inventory write-downs.

The packaged food and beverages segment, despite its scale expansion, recorded a 44 percent decline in net income, reflecting higher costs and integration pressures in the short term.

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These losses were partly offset by the paints business, operated through Chemical and Allied Products (CAP Plc). The unit delivered a 50.5 percent increase in net income to N9.1 billion, up from N6.1 billion in 2024, supported by stronger demand for premium products and improved pricing discipline.

Looking ahead, UAC enters 2026 with a significantly expanded operating base and a broader portfolio of consumer brands, including Chivita, Hollandia, Capri-Sun, SuperBite, and Beefie. While near-term profitability has been compressed, management is betting that scale, operational efficiency, and margin recovery will restore earnings momentum over the medium term.

David Olujinmi is a financial journalist, with a knack for reporting and analysing the capital markets. He has experience in reporting the Nigerian and African financial scene.

With a Bsc in Chemical Engineering from the Obafemi Awolowo University, he has a significant grasp of numbers that has aided his understanding of the financial context.

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