BUA Foods reports 38% profit surge amidst economic challenges

Despite facing significant macroeconomic challenges, BUA Foods Plc has achieved a remarkable 38 per cent increase in profit after tax, reaching N130 billion for the first half of 2024, up from N95.18 billion in the same period last year.

The company’s latest financial report, filed with the Nigerian Exchange Limited, highlights a substantial 110 percent rise in revenue, which now stands at N672.3 billion compared to N320.9 billion in 2023.

The impressive growth is largely attributed to exceptional performance in its core divisions—sugar, flour, and pasta.

Sugar sales surged by 88 per cent to N369.7 billion from N196.5bn recorded in H1 2023, flour sales increased by 164 percent to N227.9 billion as against N86.05bn in H1 2023, and pasta sales grew by 95 percent to N74.03 billion from N37.9bn in the first half of 2023.

This strong sales performance drove a 64 percent boost in gross profit, reaching N218.4 billion, while operating profit rose by 75 percent to N202.3 billion.

Despite these gains, BUA Foods grappled with a 141 percent increase in the cost of sales, which climbed to N453.9 billion. Nevertheless, the company expanded its asset base by 3.3per cent to N1.11 trillion, demonstrating resilience in the face of rising operational costs.

The Managing Director of BUA Foods, Ayodele Abioye, attributed the robust financial results to strategic initiatives, operational efficiency, and the commitment of the company’s team.

He emphasised the successful launch of new products and expansion into new markets as key drivers of revenue growth.

Abioye expressed confidence in the company’s ability to navigate future challenges and opportunities, aiming for continued sustainable growth.

BUA Foods’ stock has performed exceptionally well, appreciating by 96.43 percent from N193.4 per share in December 2023 to N379.9 as of August 2, 2024.

This performance contrasts sharply with other consumer goods stocks, highlighting BUA Foods’ strong market position and effective strategic execution.

However, Unilever Nigeria has achieved a year-to-date return of +21.28 percent, Flour Mills Plc +39.18 percent, while Nascon Allied Industries has seen a decline of -39.81 percent.

Nestle Nigeria is down by -24.55 percent, Nigerian Breweries by -22.22 percent, Dangote Sugar by -34.82 percent, International Breweries by -12.50 percent, and Guinness by -8.33 percent.