A review of the performance of quoted manufacturing companies in Nigeria showed that sixteen firms operating in the consumer and industrial goods sector raked in a sum of N2.28 trillion as revenue in the first half of the year.
The revenue earned by these companies between January and June 2022 is 26.7% higher than the N1.8 trillion generated in the corresponding period of 2021. Notably, all the companies under consideration saw their top line improve in contrast to the previous year.
In the same vein, the aggregate net profit posted by the companies increased by 14.9% from N337.57 billion in H1 2021 to N387.71 billion in the period under review. This is quite remarkable considering the surging rate of inflation in the country, which saw the cost of production of the companies increase by 25.4% to a whopping N1.24 trillion.
A further breakdown of the data compiled by Nairalytics – the research arm of Nairametrics, showed that consumer goods companies earned N1.1 trillion as revenue while industrial goods firms recorded N1.22 trillion as revenue in the same period.
Nairametrics presents the list of the best-performing manufacturing companies listed on the Nigerian Exchange in the first half of the year. You can read about the best-performing banks in the same period here. The ranking is based on revenue growth, growth in operating profit, profit growth, improvement in gross profit margin, and increase in returns on average equity (ROAE).
This ranking only considered manufacturing companies that have released their Q2 2022 financial results and have a uniform financial calendar year (I.e June 2022 as the second quarter)
Top companies by revenue growth
The sixteen companies raked in N2.28 trillion as revenue in the first half of the year from N1.8 trillion recorded in the corresponding period of 2021. Dangote Cement and Nigerian Breweries recorded the highest revenue period of N808.04 billion and N274.1 billion respectively.
Below are the leading manufacturing companies by revenue growth.
- First position – CAP Plc (+52.7%)
- Second position – BUA Cement (+51.7%)
- Third position – Cadbury (+50.5%)
- Fourth position – Beta Glass (+48.9%)
- Fifth position – Nascon (+43%)
Upshots: Cap Plc led the list of companies with high revenue growth in the first half of 2022, growing its top line by 52.7% from N5.73 billion to N8.75 billion. BUA Cement followed with 51.7% after its revenue rose from N124.3 billion to N188.56 billion.
It is worth noting that all companies recorded positive growth in their revenue in the period under review. On the flip side, BUA Foods recorded the lowest growth at 11.3%.
Top companies by growth in operating profit
Operating profit refers to the residual income after accounting for all the costs of doing business. It is calculated as revenue minus the addition of the cost of sales, operating expenses, and depreciation and amortization. Operating profit is sometimes referred to as earnings before interest and tax (EBIT).
Operating profit is a useful tool in assessing the health of a company as it takes into account all the expenses that are necessary to keep the business running. A cursory review of the data showed that the companies recorded an operating profit of N627.2 billion in H1 2022, a 24.2% increase from N505.1 billion recorded in the previous year.
Dangote Cement and BUA Cement recorded the highest operating profit of N318.1 billion and N77.7 billion respectively, while Meyer Plc recorded an operating loss of N52 million.
Below are the leading companies in terms of operating profit growth
- First position – Unilever Nigeria (+11k%)
- Second position – Cadbury (+367%)
- Third position – International Breweries (+133%)
- Fourth position – Champion Breweries (+128%)
- Fifth position – CAP Plc (+115%)
Upshots: Unilever Nigeria led the list as its operating profit rose from N26 million recorded in the first half of 2021 to N3.15 billion in the review period. On the flip side, Beta Glass recorded a 4.9% decline in its operating profit.
Top companies by growth in profit after tax
The companies under consideration posted an aggregate of N387.7 billion as profit after tax, growing their bottom line by 14.9% from N337.6 billion. Cement-producing giant, Dangote Cement posted a net profit of N172.1 billion in the first half of the year, the highest compared to others.
BUA Cement and BUA Foods followed with N61.4 billion and N39.3 billion profit after tax respectively, while Meyer Plc printed a net loss of N20.3 million.
Below are the leading companies in terms of growth in profit after tax
- First position – Cadbury (+553%)
- Second position – Unilever Nigeria (+166.7%)
- Third position – Nigerian Breweries (+142.8%)
- Fourth position – Champion Breweries (+141.6%)
- Fifth position – CAP Plc (+77.6%)
Upshots: Cadbury recorded a 553.7% increase in its profit after tax from a loss position of N516.2 million to N2.34 billion profit. Unilever Nigeria and Nigerian Breweries were second and third on the list with net profits of N1.91 billion and N18.74 billion respectively.
Top companies by an increase in gross profit margin
Gross profit margin is a measure of profitability that shows the percentage of revenue that exceeds the cost of goods sold. It is calculated as gross profit divided by revenue. The gross profit margin reflects how successful a company’s management team is in generating revenue, considering the costs involved in producing their goods.
Below are the leading companies in terms of increase in gross profit margin
- First position – International Breweries (+14%)
- Second position – CAP Plc (+9.9%)
- Third position – Cadbury (+9.2%)
- Fourth position – Unilever Nigeria (+7.1%)
- Fifth position – Nigerian Breweries (+6.1%)
Upshots: International Breweries saw its gross profit margin move from 18.8% recorded in H1 2021 to 32.9% in the review period
Top companies by ROAE growth
Return on average equity is an important metric that shows the percentage of profit made on every N1 of the shareholders’ fund. It is used to measure the performance and efficiency of the company. Of all the sixteen companies under consideration in this analysis, only Meyer recorded a negative ROAE, due to its net loss of N20.3 million printed in the period under review.
Below are the leading companies in terms of ROAE growth
- First position – Cadbury (+20.3%)
- Second position – International Breweries (+9.7%)
- Third position – Nigerian Breweries (+5.7%)
- Fourth position – Champion Breweries (+5.6%)
- Fifth position – Dangote Sugar (+5.03%)
Upshots: Cadbury recorded the highest ROAE growth in H1 2022 compared to the corresponding period of 2021, moving from a negative of 3.9% to a positive of 16.3%. International Breweries and Nigerian Breweries followed with an increase of 9.7% and 5.7% points.
The final score of the sixteen companies considered in this analysis, weighted each of the metrics equally, while companies with the lowest composite index ranked as the best companies based on their H1 2022 financial performance.
According to the analysis, Cadbury topped the list with a composite average of 2 points, ranking first in two categories, second in one, and third in two categories. CAP Plc followed in the second position with an index point of 4. CAP Plc ranked first in one category, second in one, fifth in two categories, and second position in one category
Unilever ranked third on the list with a composite average of 5.4 points
This analysis is quite appealing. Companies with well established ethics and values always stay ahead. I am interested in the impact of strategic planning on the good performance recorded by the 16 manufacturing firm. What is it that they have in common that spur their successes?
What is the total number of quoted manufacturing companies?