BUA food declares 97per cent profit growth for 2021
BUA Food Plc released its audited financial result that ended December 2021, revealing a profit of N69.77 billion, representing a 97 per cent growth from the prior-year period, as revenue grew by 73 per cent.
The year being reviewed witnessed a persistent increase in prices of goods and services, resulting in inflationary pressures that affected both consumers, whose purchasing power and disposable income were consistently dwindling, and producers who were also faced with a significant increase in the cost of raw materials and general production costs.
Although the company recorded growth in sales on the back of double-digit food inflation, bottom-line profit was affected by increased production costs as well as finance costs which grew by a whopping 78 per cent and 40 per cent, respectively, during the period under review.
A cursory view of the result shows that the group operates five key segments including Sugar, Pasta, Molasses, Bakery Flour and Bran.
The Sugar segment is classified into Fortified and Non-fortified Sugar, and both combined generated the highest revenue by segment, that is, 63 per cent of the total revenue.
The sales from Fortified Sugar segment grew by 91 per cent to generate N129 billion, while Non-fortified sugar raked in N79.16 billion y-o-y to appreciate by 136.18 per cent Bakery Flour generated the second-highest revenue, raking in N64 billion, representing 19 per cent of total revenue.
The Pasta, Molasses, and Bran segments made up the remaining 18 per cent of the total revenue.
Interest income from bank deposits stood at N2.89 billion, as against N31 million in 2020.
However, substantial interest expenses resulted in a Net finance cost of N2.16 billion.
In addition, the company also made money from rental income, to rake in a total of N1.52 billion during the financial period.
BUA Foods Plc revenue performance for the period was affected by high-interest expenses, high costs of sales, which also affected profit as a trickled down effect.
However, Advertisement expenses grew by 118 per cent which may suggest that the group grew its sales on the back of intensified promotion and advertising.
A further look at the financial results showed the group’s total assets are now at N593.47 billion, net assets appreciated by 53.28 per cent to N200.72 billion. The group’s long-term borrowings stood at N4.89 billion.
BUA Foods Plc’s earnings per share (EPS) for the period was at N4.24, an 115.23 per cent increase from N1.97 in FY 2020.
The company last traded at N59.50 per share and has appreciated by 48.75 per cent from the day of listing at N40.00.
