9 Months Results →
UACN Plc released its 2013 9 Months results showing revenues rose 27% to N60.4billion (2012 9 Months: N47.5billion). Gross profit also rose 13% YoY to N14.2billion. Pre-tax profits at the end of 9 months was N8.6billion compared to N5.8billion a year earlier. See key highlights below;
Q1 to Q3 Results[upme_private]
- Two-thrids of the company’s revenues was from its Food & Beverage Division. F& B division contributed about N40billion to revenues
- However,F&B division only contributed 33% to pre-tax profits down from 58.6% the year before. Whilst this was largely because the real estate department contributed N2.9billion this period pre-tax profits for the F&B division was actually down 14.7% from the N3.4billion it posted a year earlier.
- Also of note is the N2.9billion in pre-tax profits generated from the Real Estate Department. This arose mostly out of the company’s sale of some of its real estate properties to its REIT (Real Estate Investment Trust). It disposed N17billion worth of Real Estate to its REIT.
- Profit from this disposal can be found in Other Income which rose 862% to N3.3billion over the figure posted a year earlier
- UACN disposed of its interest in UACN Registrars and made a profit of N302million. It wound up its subsidiary, GM Ltd and made a loss of N15.2million from discontinued operations.
- Rental income (part of other income) more than doubled from N232million to N557million during the period. It will be interesting to see if this trend continues.
- Other income in general contributed about 38% of Pre-tax profits this period
- The Group also sold 49% of its interest in MDS Logistics but still retains control of the company
- The banks finance cost rose highest in the third quarter despite lending less. Gross Interest cost has now risen from N1.8billion to N2.3billion.
- Whilst a better result that it was last year, the worry for me is whether it is sustainable. The fact that it had to rely on Other income to increase pre-tax profits by 50% is not very satisfying to me. Take away the sale to the REITS and profits would be about 17% higher and not 50%.
- In fact, operating profit which I take more seriously was just added an extra N200million this year (though quarterly results shows it kept rising from Q1 through Q3). The company did not reveal breakdown of its expenses.
- UACN share price closed at N65 (25/10/13) and was trading at a high P.E of 30x and price to book ratio of 3.3x. The stock is over priced in my view considering its result and future outlook.
UACN 2013 9 Months result was posted in the website of the NSE [/upme_private]