UAC plans to raise $42.3m from shareholders after H1 profit fell, CEO says


LAGOS, July 31 (Reuters) – Nigerian conglomerate UAC expects stronger results in the second half of the year and plans to raise 15.4 billion naira ($42.3 million) from shareholders after half-year profit fell, outgoing Chief Executive Larry Ettah said on Monday.

UAC, with interests in real estate, paints, foods and livestock feed, last week posted a 59 percent fall in pretax profit to 1.63 billion naira for the half-year to June.

Ettah, who retires at the end of the year, said UAC had shareholder backing for the share sale, which it could launch around September or October, once it gets approval from the Securities and Exchange Commission.

Shares in UAC which have lost 1.4 percent this year, gained 0.12 percent to 16.70 naira on Monday. They shed 18.9 percent last year.

“Despite very high interest rate regime, outlook for H2 appears brighter following relative stability and declining inflation rate with positive impact on margins,” he told an analysts call.

High interest rates have hurt margins at UPDC, its real estate business, whose profit declined 68 percent in the first half while economic challenges impacted on sales, Ettah said.

The group is planning a 20 billion naira three-year bond for UPDC, to help refinance short-term loans, after the real estate firm sold 5.1 billion naira worth of shares, he said.

Nigeria’s annual inflation slowed to 16.25 percent in May after it recorded its first recent fall in February. However the West African country is still in a recession, brought on by low oil prices which has weakened its currency.

Ettah said the economy was gradually recovering from the recession, which sapped consumer demand and increased costs due to its effect on the naira currency.

$1 = 364.00 naira Editing by David Evans

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