BUA Foods Profit Jumps by 54% to N105.62bn
BUA Foods Plc delivered an impressive 54% year-on-year growth in net profit, up about 54% year on year to N105.82 billion. In its unaudited statement for nine months in the financial year 2023, the food company reported 81% year-on-year increase in revenue.
BUA revenue surged to N524.4 billion from N289.819 billion in the comparable period in 2022. Key drivers include slight price adjustments to reflect high input costs, volume growth and gradual commissioning of our expansion projects.
Despite the numerous political and economic headwinds experienced in the year, BUA Foods Plc sustained her leadership position in the Foods and FMCG Company listed on the Nigerian Exchange, the company said.
The company’s net profit increased by 54% year on year to N105.6 billion. All other performance indicators were sustained at double-digit growth, details from its financial scorecard showed.
The food company’s earnings per share increased by 53.7% relative to the equivalent period in 2022.
Commenting on the results, Engr. Ayodele Abioye, the Managing Director, stated: “We are pleased to report a strong and successful fiscal YTD performance for BUA Foods having delivered strong top and bottom line returns across business portfolios and key financial metrics.
“We have experienced double-digit growth within the period with revenue year to date up by 81% and PAT by 54%, underscoring the strength of our business strategy, dedication of our exceptional team and support of our strategic partners.
“These were achieved despite the complexities presented by rising inflation, high interest rate resulting in pressure on consumer income, and Naira depreciation which led to FX losses”.
The CEO said BUA Foods Plc. has not only weathered the storm but has thrived.
“We have strategically navigated challenges by embracing change, doubling down on efficiency, and carefully optimizing costs without conceding our commitment to quality and service.
“Moreover, our focused investments in expansion projects are on course, providing a solid foundation for further growth and competitiveness.
“We remain excited about the prospects that lie ahead despite the headwinds and confident in our business resilience for a sustained positive momentum.”
The breakdown shows that the company’s revenue was supported by an increase of 74.2% in Sugar business segment to ₦315.2 billion from ₦180.9 billion.
Also, there was a 126% surge in Flour sales to ₦149.9 billion from ₦66.2 billion in the comparable period and a 37% surge in revenue from Pasta sales to ₦58.3 billion.
The company said the rice business contributed ₦995 million to the top line same period. It added that there was significant growth in volume sold across the business divisions, impacting the overall performance.
There was a 74.1% increase in cost of sales to ₦340.6 billion in 9M 2023 from ₦195.6 billion in the comparable period, driven by an increase in raw materials cost and energy cost.
BUA Foods said the high input cost environment and further devaluation of the Naira against the US Dollar weighed heavily on prices for raw materials.
This resulted in a higher cost of production, the company said.
The result showed that gross profit increased by 95.1% to ₦183.8 billion in 9M 2023 from ₦94.2 billion. This helped bolster gross profit margin which appreciated by 250bps to 35.0% in 9M 2023 versus 32.5% in the comparable period.
The company relates the improved margin to a slight selling price adjustment and new market penetration for sales within the year.
Amidst high inflationary conditions, the company’s selling and distribution expenses increased by 95.8% to ₦20.3 billion.
BUA indicates that the steep rise was on the back of an increase in the cost of diesel within the period and a renewed focus on an aggressive sales strategy to push volume.
Administrative expenses also increased by 76.3% to ₦7.9 billion in 9M 2023, driven majorly by the increase in general expenses. Its result showed a 41.1% year-on-year increase in general expenses to ₦1.2 billion from ₦885 million).
BUA’s operating profit grew by 94.5% to ₦156.9 billion, benefitting from top-line growth driven by price adjustment, and local market expansion.
According to the company, the increase was also supported by export sales and gradual commissioning of the company’s ongoing expansion plans.
In the period, the company’s operating profit margin appreciated by 210bps to 29.9% in 9M 2023 as against 27.8% the company achieved in the comparable period in 2022.
BUA Foods’ profit before tax increased significantly by 50% to ₦111.4 billion, according to its financial scorecard.
Profit after tax grew by 53.6% to ₦105.6 billion from ₦68.8 billion while the Earnings per Share grew by 53.6% to N5.87 in 9M 2023 from N3.82 in the corresponding period. Canada Pledges $18m For Poverty, Humanitarian Response in Nigeria