BUA Foods’ pre-tax profit increased 94% from N111.4 billion in the first nine months of 2023 to N215.66 billion in the first nine months of 2024.
The company’s unaudited financial statement for January through September 2024 shows revenues of N1.07 trillion, up from N524.42 billion during the same time in 2023.
Notwithstanding the substantial profits, the company’s performance in the first nine months was hampered by a sharp rise in manufacturing costs and foreign exchange losses.
Key Highlights of the Financial Results
- Revenue: N1.07 trillion, up 104% YoY
- Cost of Sales: N736.97 billion, up 116% YoY
- Gross Profit: N333.82 billion, up 82% YoY
- Administrative Expenses: N14.54 billion, up 84% YoY
- Selling & Distribution Expenses: N29.31 billion, up 46% YoY
- Operating Profit: N315.12 billion, up 101% YoY
- Finance Costs: N21.65 billion, up 44% YoY
- Foreign Exchange Loss: N87.96 billion, up 164% YoY
- Profit Before Tax: N215.65 billion, up 94% YoY
- Income Tax Expense: N14.26 billion, up 147% YoY
- Profit After Tax: N201.38 billion, up 91% YoY
- Earnings Per Share: N11.19k, up 91% YoY
Performance In The Third Quarter
Similar to its nine-month period, the company’s revenue increased in the quarter ending in September 2024. With revenues of N398.4 billion and cost of sales of N283.02 billion, the third quarter of 2024 saw a gross profit of N115.38 billion, more than 100% more than the same period the previous year.
The company’s net finance cost for the third quarter was N1.10 billion, a staggering decrease from the N5.89 billion it posted during the same period last year.
In contrast, foreign exchange losses in the third quarter of 2024 were N33.29 billion, nearly unchanged from N33.28 billion in the same period in 2023.
Analysis: With sales of more than N1 trillion in the first nine months of this year, the business has now surpassed the projected 2023 total revenue of N728.44 billion.
However, 70% of revenues were spent because of a large increase in the cost of sales brought on by rising energy and raw material prices.
The electricity and raw materials cost increased by more than 100% throughout the reviewed period. The company spent N686.19 billion on raw materials and N37.1 billion on energy between January and September 2024. The numbers are N14.42 billion and N310.15 billion for the previous year, respectively.
During the period under review, sales of fortified sugar totaled N421.77 billion, and bakery flour totaled N384.13 billion, accounting for most
of the company’s income. The company made N134.79 billion from the sale of wheat bran and N121.93 billion from the sale of unfortified sugar.
Price increases, rather than increases in sales quantities, are probably the cause of the staggering rise in revenues in the first nine months of 2024. Food costs, such as those of sugar, maize, pasta, and other items, increased due to Nigeria’s inflation, which peaked at 34.19% and exceeded 40%.
