BUA Foods’ Revenue Wilts on Trade, Other Receivables

Kayode Tokede
BUA Foods Plc’s revenue shrank to N417.82 billion in 2022 unaudited financial statement for period ended December 31, from N333.27 billion in 2021 audited financial statement, following the company’s N142.12 billion trade & other receivables in 2022 from N52.16 billion reported in 2021.
With about 172.5 per cent growth in BUA Foods’ trade & other receivables against 25.4 per cent increase in revenue, the Group saw its Prepayments, Trade Debtors and “Other Receivables” gaining momentum in the period under review.

The Consumer Goods Company in the three years has witnessed 779 per cent increase in trade & other receivables from N16.19 billion in 2020 to N142.12 billion reported in 2022. The underlined increase in trade & other receivables can be attributable to macro economy challenges influenced by consumer low purchasing power.

Amid significant increase in trade & other receivables, the BUA Foods revenue has also tripled from N192.86 billion in 2020 to N4417.82 billion in 2022.
With BUA Foods reporting increase in trade and other receivables, its trade and other payables has also seen steady increase from N24.35 billion in 2020 to N54.65nbillion in 2022.

Key contributing factors to BUA Foods trade and other payables include, trade creditors/ other current liabilities and withholding/ value added tax payables in 2022 unaudited financial statements.
From the profit & loss figures, the growth in BUA Foods’s sugar revenue was driven by price adjustments and export sales within the period.
Revenue from Sugar (Non-fortified) closed 2022 at N144.29billion, representing an increase of 82.3per cent from NN79.16billion in 2021, while revenue from Sugar (Fortified) stood at N129.2billion in 2022, a decline of 0.45 per cent from N129.84billion reported in 2021.

Revenue from molasses, thus, increased by 69.25 per cent to N743.03 million in 2022 from N439.02million in 2021.
For the Flour division, Bakery Flour revenue stood at N79.86 billion in 2022 from N64.19 billion in 2021, as Pasta reached N57.41billon in revenue from N54.4billion reported in 2021.
In addition to BUA Foods revenue, sales from Wheat Bran hit N6.26 billion in 2022, an increase of 19.4 per cent from N5.24 billion in 2021.

Growing Cost of sales
BUA Foods announced 23 per cent growth in cost of sales to N282.3billion in full year under review as against N230.3 billion in prior period, driven by 21.04 per cent increase in raw materials cost to N255.65 billion as Energy cost moved by 28.1 per cent to N11.73 billion in 2022.
The high input cost environment and further devaluation of the Naira against the Dollar weighed heavily on prices for raw materials in nine months of 2022 and it resulted in higher cost of production.

The group closed the 12 months of 2022 with about 31.6 per cent increase in gross profit to N135.51billion from N102.96billiion to positioned its gross profit at 32.4 per cent from 30.9 per cent in 2021.
Selling and distribution expenses increase by 69per cent to N17.09 billion in 2022 from N10.14billion in 2021 due to huge increase in cost of diesel within the period as administrative expenses dropped by 22.5 per cent to N11.34billion in 2022 from N14.63billion in 2022.

The Group’s total operating expenses increased by 14.8per cent to N28.43 billion in 2022 from N124.76billion in 2021 over increase in selling and distribution cost along the supply chain to customers.
Operating profit grew by 36per cent to N79.89 billion in 2022 from N79.89 billion in 2021, benefitting from top line growth coupled with lower administrative expenses.

Finance charges increase by 62 per cent to N8.2 billion in 2022 as against N5.05 billion reported in  2021, due to efficient funding mix along business transaction.
In addition, Profit before tax increased by 29.45 per cent to N100.64 billion in 2022 from N77.74 billion in 2021, as profit before tax margin increased by 244.08 in 2022 from 23.3 per cent in 2021 due to increase in revenue.
Profit after tax increased by nearly 30per cent to N90.4 billion in 2022 as against N69.77 billion in 2021, while the Earning per Share (EPS) grew stood at N5.02 in 2022 from N3.88 in the corresponding period.

Balance sheet position
Total assets increased by 3.14per cent to N612.1billion in 2022 unaudited results from N593.46billion reported in 2021 full financial year, driven largely by growth in trade and other receivables (+172.5per cent; 23.2 per cent of total assets).
Total liabilities dropped by 6.6per cent to N366.9 billion in 2022 from N392.8 billion. This was driven mainly by a 21 per cent decline in short-term borrowings to N190.62billion in 2022 from N241.16billion reported in 2021.
Total equity increased by 22per cent to N245.2 billion in 2022 (FY 2021: N200.7 billion).

Company’s outlook
According to the company, the recent environmental disruptions such as flooding impacting on logistics efficiencies, energy cost, rising input cost, coupled with rising foreign exchange concerns and tightening stance of the Central Bank of Nigeria (CBN) which further interest rate to 16.5per cent are all core mitigating areas for BUA Foods.
The company added that, “We expect optimizing our supply value chain as we strive to increase market share across market regions.
“Furthermore, our rice division recommencement is on course as we continue to nourish lives and increase market reach.
“Our retail strategy remains a priority for us in the near term, while we drive to sustain the upward momentum of our export market strategy. We remain committed to reducing Africa insecurity issues while nourishing lives.”