Despite the numerous political and economic headwinds impacts experienced in the year, BUA Foods Plc sustained her leadership position in the Foods and FMCG Company listed on the NGX with a profit after tax (PAT) growth of 54 percent to N105.6 billion for the nine-month ended September 2023.
In a corporate filing with the Nigerian Stock Exchange Limited, the company said all other performance indicators were sustained at double digits growth even as earnings per share increased by 53.7 percent relative to same period in 2022.
Gross profit made a leap of 95.1 percent during the period under review to N183.78 billion as against N94.17 in the same period of last year.
Commenting on the results, Engr. Ayodele Abioye, the Managing Director, stated: “We are 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% and PAT by 54%, underscoring the strength of our business strategy, dedication of our exceptional team and support of our strategic partners. These were achieved despite the complexities presented by rising inflation, high interest rate resulting in pressure on consumer income, and Naira depreciation which led to FX losses.
“Clearly, BUA Foods Plc. has not only weathered the storm but has thrived. We have 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 is on course, providing a solid foundation for further growth and competitiveness.
We remain excited about the prospects that lie ahead despite the headwinds, and confident in our business resilience for a sustained positive momentum.”
Key Highlights of Group performance
Revenue grew by 81% y-o-y to ₦524.4 billion in 9M 2023 (9M 2022: ₦289.8 billion). This was due to a y-o-y increase of 74.2% in Sugar to ₦315.2 billion (9M 2022: ₦180.9 billion), 126% in Flour to ₦149.9 billion (9M 2022: ₦66.2 billion), and 37% in Pasta to ₦58.3 billion (9M 2022: ₦42.7 billion). New division Rice business contributed ₦995 million to the top line same period. Across the business divisions there were significant growth in volume sold impacting the overall performance as well. Key drivers include slight price adjustments to reflect high input costs, volume growth and gradual commissioning of our expansion projects.
Increase in cost of sales (+74.1%) to ₦340.6 billion in 9M 2023 (9M 2022: ₦195.6 billion) was driven by an increase in raw materials cost and energy cost. 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 higher cost of production.
Gross profit increased by 95.1% to ₦183.8 billion in 9M 2023 (9M 2022: ₦94.2 billion) even as gross profit margin appreciated by 250bps to 35.0% in 9M 2023 (9M 2022: 32.5%) due to the slight selling price adjustment and new market penetration for sales within the year.
Selling and distribution expenses increase by 95.8% to ₦20.3 billion in 9M 2023 (9M 2022: ₦10.4 billion) due to increase in cost of diesel impacting within the period and renewed focus on aggressive sales strategy to push volume.
Administrative expenses also increased by 76.3% to ₦7.9 billion in 9M 2023 (9M 2022: ₦4.5 billion) driven majorly by the increase in general expenses (41.1%) to ₦1.2 billion in 9M 2023 (9M 2022: ₦885 million). Others key highlights includes Bank Charges valued at ₦1.28 billion.
Operating profit grew by 94.5% to ₦156.9 billion in 9M 2023 (9M 2022: ₦80.7 billion) benefitting from top line growth driven by price adjustment, local market expansion and our export sales and gradual commissioning of our ongoing expansion plans. Operating profit margin appreciated by 210bps to 29.9% in 9M 2023 (9M 2022: 27.8%).
