BUA Foods: Soar in raw materials weaken profit

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By Philemon Adedeji

Due to increase in cost of raw materials to N101.4 billion in half year H1 2022 from N84.2 billion reported in half year H1 2021, cost of sales during the period of study grew by 16.11 per cent to N116.8 billion in H1 2022 from N100.6 billion achieved in H1 2021.

However, the food processing company reported 10.8 per cent increase in Profit Before Tax (PBT), to N42.7 billion in H1 2022 from N38.6 billion accounted for the first six months of June ended 30,  2022.

The group unaudited results showed Profit After Tax (PAT), grew significantly by 13.7 per cent to N39.3 billion in H1 2022 from N34.6 billion achieved in H1 2021.

The increase in cost of sales causing gross profit to rose slightly by 1.8 per cent from N51.1 billion as of end of June 30, 2021 to N52.1 billion achieved as of end of June 30, 2022.

From the profit and loss figure, the group net revenue moved from N151.7 billion as of end of June 30, 2021 to N168.9 billion as of end of June 30, 2022, an increase of 11.3 per cent.

In addition, The group grew its Earnings Per Share (EPS), by 13.5 per cent to N2.18 in H1 2022 from N1.92 achieved as of June 30, 2021.

The break down of BUA foods revenue showed 55.7 per cent increase in sales of non-fortified (Sugar) to N53.9 billion in H1 2022 from N34.6 billion achieved in H1 2021, while revenue generated from the sales of fortified (Sugar) declined by 10.1 per cent to N54.8 billion in H1 2022 from N60.9 billion in H1 2021.

The revenue generated from the sales of bakery flour rose by 14.4 per cent to N31.4 billion in H1 2022 from N27.5 billion in H1 2021.

Again, revenue reported in the sales of molasses gained a 102.2 per cent to N387.9 million in H1 2022 from N191.8 million in H1 2021, as revenue generated from the sales of pasta moved from N25.8 billion in H1 2021 to N28.9 billion in H1 2022, an improvement of 11.9 per cent.

In addition,the food processing company reported total assets which gained a 8.7 per cent to N645.4 billion in H1 2022 from N593.5 billion in H1 2021.

As current assets gained a 19.2 per cent to N322.1 billion in H1 2022 from N270.2 billion in H1 2021, but non-current assets declined by 0.1 per cent to N323.2 billion in H1 2022 from N323.3 billion in H1 2021.