Revenue, Other Income Boost BUA Foods’ Profit

Kayode Tokede

BUA Foods Plc’s 2022 audited result and accounts showed an impressive performance driven by strong revenue and other income amid challenging operating environment.

The growth in revenue impacted on profit and dividend payout to shareholders.

BUA Foods announced N418.35billion revenue in 2022, an increase of 26 per cent from N333.27billion in 2021 and declared profit after tax of about N91.34billion in 2022 from N69.77billion reported in 2021.

The group’s Earning per Share (EPS) stood at N5.07 in 2022 from N4.22 in the corresponding period.

With the increase in profit after tax, the board of directors recommended for the approval of shareholders a payment of N4.50k dividend per 1 ordinary share of 50 kobo each, out of the profits declared in 2022 (2021: N3.50k dividend per 1 ordinary share of 50 kobo each).

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 N145.16billion, representing an increase of 83per cent from N79.15billion in 2021, while revenue from Sugar (Fortified) stood at N129.24billion 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 N743.03million in 2022 from N439.02million in 2021.

For the Flour division, Bakery Flour revenue stood at N79.68billion in 2022 from N64.19billion in 2021, as Pasta reached N57.24billon in revenue from N54.4billion reported in 2021.

In addition to BUA Foods revenue, sales from Wheat Bran hit N6.26billion in 2022, an increase of 19.4per cent from N5.24billion in 2021.

Nigeria is the Group’s major geographical segment as 86per cent of the Group’s revenue is earned from sales in Nigeria as against 100 per cent it was in 2021.

BUA Foods announced 23 per cent growth in cost of sales to N285.56billion in full year under review as against N230.3billion in prior period, driven by 23 per cent increase in raw materials cost to N260.18billion in 2022 from N211.21billion reported in 2021.

Cost of raw materials amounted for 91.11per cent cost of sales in 2022 against 91.7 per cent in 2021.

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 58 per cent increase in gross profit to N132.79billion from N102.96billiion to positioned its gross profit at 31.74 per cent from 30.9 per cent in 2021.

Selling and distribution expenses rise to N14.19 billion in 2022 from N10.14billion in 2021 due to huge increase in cost of diesel within the period as administrative expenses closed 2022 at N18.13billion from N14.63billion in 2021.

The Group’s total operating expenses increased by 33per cent to N32.92 billion in 2022 from N24.76billion in 2021 over increase in selling and distribution cost along the supply chain to customers.

Operating profit grew by 47per cent to N117.49 billion in 2022 from N79.89 billion in 2021, benefitting from top line growth coupled with lower administrative expenses.

Finance charges increase by 72.7 per cent to N8.72 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 38.4per cent to N107.23 billion in 2022 from N77.47billion in 2021, as profit before tax margin increased by 25.6 in 2022 from 23.24 per cent in 2021 due to increase in revenue.

Total assets increased by 2.32per cent to N607.22billion in 2022 audited results from N593.46billion reported in 2021 full financial year, driven largely by growth in trade and other receivables (+128per cent; 20 per cent of total assets).

Total equity increased by 15per cent to N230.96 billion in 2022 (FY 2021: N200.7 billion).

The company in a statement said 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.”