BUA’s income increased to N524.4 billion in 2022 from N289.819 billion during the same time the previous year. Key motivators are volume growth, a gradual commissioning of our expansion projects, and minor pricing modifications to reflect rising input prices.
According to the firm, BUA Foods Plc maintained her leading position in the Foods and FMCG firm listed on the Nigerian Exchange despite the many political and economic challenges faced during the year.
The business’s net profit rose to N105.6 billion, a 54% annual gain. Details from its financial scorecard revealed that all other performance measures continued to climb by double digits. Comparing the food company’s earnings per share to the same time in 2022, there was a 53.7% rise.
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.”
According to the breakdown, the company’s revenue was bolstered by a 74.2% increase in the Sugar business area, which saw its value rise from ₦180.9 billion to ₦315.2 billion. Additionally, there was a 37% increase in income from Pasta sales to ₦58.3 billion and a 126% explosion in Flour sales to ₦149.9 billion from ₦66.2 billion in the similar period.
According to the corporation, within the same period, the rice industry generated ₦995 million to the top line. It further stated that the volume sold increased significantly across all business divisions, which had an effect on the performance as a whole.
The cost of energy and raw materials increased, resulting in a 74.1% increase in cost of sales from ₦195.6 billion in the comparable period to ₦340.6 billion in 9M 2023.
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.
