UAC of Nigeria (UACN) PLC delivered a standout financial performance in the first quarter of 2026, reporting a more than threefold increase in both revenue and profit, driven by the full consolidation of C.H.I. Limited following its acquisition from The Coca-Cola Company in October 2025. The company recorded revenue of ₦191.22 billion, a 241.5 percent surge from ₦56.00 billion in the same period of 2025, marking one of the strongest quarterly growth rates in recent memory. This expansion was supported by organic growth in packaged food, beverages, and paints, alongside the integration of C.H.I.’s operations.
Gross profit rose sharply to ₦54.81 billion from ₦14.26 billion, with the gross margin expanding to 28.7 percent from 25.5 percent. This improvement was attributed to better pricing strategies, procurement optimisation, and a stronger contribution from higher-margin business units. Operating profit climbed to ₦28.40 billion from ₦6.83 billion, while the operating margin improved to 14.8 percent. However, operating expenses surged 230.9 percent to ₦26.86 billion, primarily due to the integration of C.H.I.’s cost structure.
Profit before tax jumped to ₦22.59 billion from ₦5.04 billion, while profit after tax increased by 311.4 percent to ₦13.64 billion. Earnings per share rose to 449 kobo from 106 kobo, highlighting the scale of earnings growth. Despite these impressive figures, underlying challenges are emerging. Net finance cost rose sharply to ₦6.49 billion from ₦2.09 billion, largely due to higher borrowing costs linked to the acquisition. This was partially offset by a ₦6.8 billion one-off foreign exchange gain, suggesting core finance costs may be structurally higher than reported.
Segment-wise, the Packaged Food and Beverages segment dominated with ₦161.09 billion in revenue, accounting for the majority of group turnover after C.H.I.’s consolidation. It also delivered strong profitability, with profit before tax rising to ₦21.46 billion. The Paints business showed steady growth, with revenue up 15 percent to ₦11.59 billion and profit before tax increasing 37 percent. In contrast, the Edibles and Feed segment saw a 31 percent decline in revenue to ₦17.95 billion due to pricing pressures and weaker volumes. The Quick Service Restaurants segment remained loss-making, posting a ₦317 million loss before tax, though this was an improvement from the previous year.
On the balance sheet, leverage improved significantly, with the long-term debt-to-EBITDA ratio falling to 2.1x from 3.2x, and net debt-to-EBITDA improving to 3.5x from 5.9x. Free cash flow surged to ₦34.57 billion from ₦14.38 billion, reflecting enhanced liquidity and operational efficiency. However, return metrics tell a mixed story: annualised return on equity soared to 64.7 percent from 18.8 percent, while return on invested capital declined to 32.1 percent from 45.1 percent, indicating that the expanded capital base has not yet fully translated into efficient returns.
UACN’s Q1 2026 results reflect a clear transformation story powered by acquisition-led growth. While the integration of C.H.I. Limited has significantly boosted scale and profitability, it has also introduced higher financing costs and increased reliance on a single dominant segment. For investors, the critical challenge now lies in execution—sustaining margin expansion, managing debt costs, and restoring balanced growth across all segments will determine whether the current momentum can be maintained beyond the initial post-acquisition surge.
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