BUA Foods grows profit to N130bn despite headwinds

BUA Foods Plc has recorded a 38 per cent growth in its profit after tax to N130bn at the end of June 2024, compared to N95.18bn in the same period of 2023 despite the macroeconomic headwinds.

This was indicated in its financial results for the half-year filed with the Nigerian Exchange Limited recently.

 The financial report indicated that the company’s revenue rose by 110 per cent to N672.3bn against N320.9bn posted in 2023, driven primarily by strong performance in its sugar, flour, and pasta divisions.

According to the report, the growth was due to a year-on-year increase of 88 per cent sugar sales to N369.7bn from N196.5bn recorded in H1 2023, 164 per cent in Flour sales to N227.9bn as compared to N86.05bn in H1 2023, and 95 per cent in Pasta sales to N74.03bn from N37.9bn in the first half of 2023.

Gross profit appreciated by 64 per cent to N218.4bn, driven by increased sales across its product lines. Operating profit also climbed by 75 per cent to N202.3bn, reflecting improved operational efficiency.

However, the company faced rising costs, with the cost of sales soaring by 141 per cent to N453.9bn. Despite this, BUA Foods managed to expand its asset base, with total assets increasing by 3.3 per cent to N1.11tn

Commenting on the results, Managing Director of BUA Foods, Ayodele Abioye, said, “The first half of the year has been one of significant resilience and achievements for our company.

We attained a robust financial performance, with total revenue increasing by 110 per cent to N672.3bn compared to the same period last year. Our gross profit stands at N218.4bn, reflecting a growth of 64 per cent. This solid performance is a testament to the efficacy of our strategic initiatives, operational efficiency, and unwavering dedication of our board, management, and other members of staff.

“During this period, we have made significant strides in executing our strategic plans, successfully launching new products, specifically, macaroni, premium pasta, and semolina to meet the yearnings of our customers. Our diversified portfolio and expansion into new markets impacted revenue growth while strengthening our partnership with key stakeholders We also maintained a strong focus on cost optimisation, resulting in sustained margins and profitability.”

On projection for the second half, Abioye said, “Looking ahead, we remain confident in our ability to navigate the challenges and opportunities in the market. We will continue to leverage our strong and orchestrated supply chain system to deliver a great financial performance in line with our strategic vision for sustainable growth and value creation for all stakeholders.

Between December 2023 and August 2nd, the shares of BUA Foods had appreciated by 96.43 per cent from N193.4 per share to N379.9.

This is higher when compared to similar consumer goods stocks; Unilever Nigeria’s year-to-date returns of +21.28 per cent; Flour Mills Plc (+39.18 per cent); Nascon Allied Industries (-39.81 per cent); Nestle Nigeria (-24.55 per cent), Nigerian Breweries, (-22.22 per cent); Dangote Sugar, (-34.82 per cent); International Breweries, (-12.50 per cent), and Guinness, (-8.33 per cent).

Analysts said that BUA Foods’ diversified portfolio and expansion into new markets impacted its revenue growth.