BUA Foods Declares 22% Growth in Profit  to N111.5bn

Kayode Tokede

BUA Foods Plc has announced A profit after tax of N111.5billion for the fiscal year ending December 31, 2023 as against N91.34 billion reported in 2022 financial year, an increase of 22 per cent

The company’s unaudited results announced on the Nigerian Exchange Limited (NGX) showed that its profit before tax that increased significantly by 12.6 per cent to N120.8 billion in 2023 compared to N107.2 billion in 2022.

The leading food business with well-diversified and scalable operations  recorded an impressive revenue growth of N728.5 billion, representing a 74 per cent increase compared to 2022 earnings of N418.3 billion amidst global headwinds.

Gross earnings increased by 89 per cent to N251.32 billion, with earnings per share growing by 22 per cent from N5.07 in 2022 to N6.20 at the end of 2023.

Additionally, following a slight selling price adjustment within the period under review, the gross profit margin appreciated by 280 basis points to 34.5per cent.

BUA Foods’ 2023 impressive financial result was driven by a y-o-y increase of 53per cent in Sugar revenue to N421.5 billion, 152per cent in Flour to N216.9 billion and 54 per cent in Pasta to N87.9 billion (12months of 2022: N57.2 billion) demonstrating the Company’s resilience and commitment to excellence in its strategy, financials, capital market performance, social governance and future outlook.

Key earning drivers for 2023 include production volumes and assets growth that witnessed an outstanding 82per cent surge in operating profit, reaching an impressive N213.2 billion compared to N117.4 billion in the same period in 2022.

This remarkable growth is attributed to strategic price adjustments and a significant volume boost resulting from the successful capacity expansion of its IRS production facility. Assets also increased by 21per cent to N734billion.

The company maintained a strong profit margin throughout the year, reflecting effective cost management and strategic financial planning.

BUA Foods also witnessed a dynamic performance across its operating segments, showcasing a strategic and diversified approach to revenue generation. Despite varying revenue growth across each division, BUA Foods has demonstrated a cohesive strategy, leveraging market dynamics to achieve impressive financial results.

While the sugar division contributed 58 per cent to overall revenue, Sugar revenue experienced a 53 per cent growth, reaching N421.5 billion. This impressive result was primarily driven by strategic price adjustments while volume sold increased marginally by five per cent.

The Flour division contributed 30 per cent to total revenue and exhibited substantial growth with a 152 per cent increase in revenue to N216.9 billion. This growth was fuelled by volume increases and strategic price adjustments within the period, leading to a significant rise in the contribution margin from 18per cent to 27 per dent for the same period last year.

In addition, the Pasta division contributed 12per cent to overall revenue and BUA Foods recorded a 54 per cent increase in revenue to N87.9 billion. This growth was attributed to the gradual commissioning of new pasta production lines, resulting in a 16 per cent  increase in production volume to 129,062 tons.

Commenting on the results, the Managing Director, BUA Foods,  Ayodele Abioye in a statement said: “We are proud of the solid performance recorded despite a persistent and challenging macro environment. BUA Foods delivered strong growth despite the persistent devaluation of the naira during the period which led to a substantial and negative impact of foreign exchange losses. Despite the margin squeeze on operating profit to 82per cent, our business remained resilient to deliver bottom line growth of 22 per cent to N111.5billion.

“Our expansion strategies across all frontiers continue to crystallise in supporting growth. We remained committed to accelerating alternative and local raw materials sourcing delivery across all our operating units. This includes the Backward Integration Policy project for our sugar development as a softening opportunity to rely less on forex. 

“As we continue to look ahead, our integrated supply chain execution strategy will continue to be strengthened to sustain the delivery of growth across our financial metrics. We are confident in our plans for the year 2024 in the face of the business uncertainties. BUA Foods remains committed to creating long-term value for all stakeholders and operationalising its creed to nourish lives and promote food security.”