BUA Foods Records 81% Revenue Increase In Nine Months
BUA Foods has raked in N524.4 billion in revenue in the nine months of 2023, translating to an 81 percent increase over N289.8 billion realised within the period in 2022.
This feat was pulled due to a y-o-y increase in revenue from all the divisions of the food business with the Sugar unit contributing N315.2 billion, the highest in revenue.
The breakdown shows the Sugar unit realised N315.2 billion, 74.2 percent over the N180.9 billion realised in the nine months of 2022 while the revenue from the Flour unit went up by 126 percent in Flour to ₦149.9 billion from N66.2 billion earned in nine months of 2022 and an increase of 37 percent in the revenue from the Pasta unit pushed its earnings to ₦58.3 billion from N42.7 billion of 2022.
The new division Rice business contributed ₦995 million to the top line same period. Across the business divisions, there was significant growth in volume sold impacting overall performance as well.
Key drivers according to its third-quarter results for 2023 submitted to the Nigeria Exchange Group include slight price adjustments to reflect high input costs, volume growth and gradual commissioning of its expansion projects. The 74.1 per cent increase that drove the cost of sales to ₦340.6 billion in nine months in 2023 from N195.6 billion in the corresponding period in 2022 owes to an increase in the price of raw materials and energy costs.
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 overall development pushed gross profit up to ₦183.8 billion in the nine months of 2023, representing a 95.1 percent increase over ₦94.2 billion even as gross profit margin appreciated by 250bps to 35 percent in the period in 2023, and over 32.5 percent in the corresponding period in 2022 due to the slight selling price adjustment and new market penetration for sales within the year.
Selling and distribution expenses increased by 95.8 percent to ₦20.3 billion in the period over N10.4 billion in 2022 due to the increased cost of diesel impacting the period and a renewed focus on an aggressive sales strategy to push volume.
Administrative expenses also increased by 76.3 percent to ₦7.9 billion in the nine months of 2023 over N4.5 billion in 2022 and were driven majorly by the 41.1 percent increase in general expenses which rose to ₦1.2 billion in 9M 2023 from N885 million in 2022.
Other key highlights include Bank Charges valued at ₦1.28 billion, operating profit grew by 94.5 percent to ₦156.9 billion in 2023 from N80.7 billion in 2022, benefitting from top-line growth driven by price adjustment, local market expansion and our export sales and gradual commissioning of our ongoing expansion plans.
In all, the operating profit margin appreciated by 210bps to 29.9 percent in the period in 2023 over 2022’s 27.8 percent.
Profit before tax increased significantly by 50 percent to ₦111.4 billion in the nine months over N74.2 billion in the corresponding period in 2022 while sustaining her double-digit profit before tax margin at 21.2 percent, lower to 25.6 percent of 2022.
Profit after tax grew by 53.6 percent to ₦105.6 billion in 9M 2023 over nine months of 2022 while Earnings per Share (EPS) grew by 53.6 percent to N5.87 in 9M 2023 from N3.82 in the corresponding period.
Total assets increased by 24.8 per cent to ₦757.8 billion as of 9M 2023 over N607.2 million of 2022. This was driven largely by growth in trade and other receivables of ₦215.6 billion from ₦119.3 billion representing 72.3 per cent at FY 2022.
Total liabilities increased by 33.5% to ₦502.3 billion as of 9M 2023 (FY 2022: ₦376.2 billion). This was driven mainly by a surge in other current liabilities of 133.3% to ₦109.9 billion from ₦47.1 billion in FY 2022. Total equity increased by 10.7% to ₦255.6 billion as of 9M 2023 (FY 2022: ₦230.9 billion) mainly due to double-digit growth of 11% in retained earnings to ₦247.5 billion as of 9M 2023 (FY 2022: ₦222.9 billion).
Ayodele Abioye, the Managing Director, stated management is 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 YTD up by 81 percent and PAT up by 54 percent, underscoring the strength of our business strategy, the dedication of our exceptional team and the support of our strategic partners. These were achieved despite the complexities presented by rising inflation, high interest rates resulting in pressure on consumer income, and Naira depreciation which led to FX losses.
He said BUA Foods Plc has not only weathered the storm but has thrived, having 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 ahead despite the headwinds and confident in our business resilience for sustained positive momentum”, he said
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