BUA Foods in the first nine months of 2024 saw its pre-tax profit rise by 94% from N111.4 billion in the first nine months of 2023 to N215.66 billion.
In its unaudited financial statement for the period January to September 2024, the company recorded revenues up to N1.07 trillion- an increase from N524.42 billion in the same period of 2023.
Despite the large revenues, the company saw a significant increase in cost of production and foreign exchange losses which curtailed its performance in the first nine months of the year.
The high cost of production was caused by a 100% increase in raw materials and energy costs during the period.
Key Highlights of the result
- Revenue- N1.07 trillion, +104% YoY
- Cost of sales- N736.97 billion, +116% YoY
- Gross Profit- N333.82 billion, +82% YoY
- Admin expenses- N14.54 billion, +84% YoY
- Selling and distribution expense- N29.31 billion, +46% YoY
- Operating profit- N315.12 billion, +101% YoY
- Finance cost- N21.65 billion, +44% YoY
- Foreign exchange loss- N87.96 billion, +164% YoY
- Profit Before Tax- N215.65 billion, +94% YoY
- Income tax expense- N14.26 billion, +147% YoY
- Profit After Tax- N201.38 billion, +91% YoY
- Earnings Per Share- N11.19k, +91% YoY
Third Quarter performance
In the quarter leading to September 2024, the company recorded increases in revenue similar to its nine months period. In the third quarter of 2024, revenues soared to N398.4 billion with cost of sales at N283.02 billion resulting in a gross profit of N115.38 billion- over 100% increase from the same period of last year.
- During the third quarter, the company recorded net finance cost of N1.10 billion- a whopping decline from N5.89 billion it recorded in the same period of last year.
- However, foreign exchange losses in the third quarter of 2024 remained almost unchanged at N33.29 billion from N33.28 billion in the third quarter of 2023.
Commentary: the revenues of over N1 trillion in the first nine months of the year means the company has now exceeded its total revenue for 2023 which stood at N728.44 billion.
- However, a significant increase in the cost of sales due to a rise in energy costs and raw materials means that 70% of revenues was consumed.
- In the period under review, raw material and energy costs soared by over 100%. Between January and September 2024, the company spent N686.19 billion on raw materials while energy costs stood at N37.1 billion. The figures for the preceding year are N310.15 billion and N14.42 billion respectively.
- The bulk of the company’s revenue in the period under review stems from the sales of fortified sugar which stood at N421.77 billion, followed by Bakery flour, which recorded N384.13 billion. Sales of wheat bran and unfortified sugar resulted in a turnover of N134.79 billion and N121.93 billion respectively for the company.
- The whopping increase in revenues in the first nine months of 2024 most likely stems from an increase in prices and not in volumes sold. Nigeria’s inflation in the period peaked at 34.19% with food inflation crossing 40% resulting in a spike in food prices like sugar, maize, pasta, etc.
