BUA Foods, one of Nigeria’s leading food processing companies, has announced a 90.63% year-on-year revenue growth of ₦320.9 billion in the first half (H1) of 2023, up from ₦168.8 billion in the same period last year.
The company’s strong performance can be attributed to its strategic initiatives, including an 80% surge in Sugar sales, a remarkable 154% increase in Flour sales, and a substantial 47% growth in Pasta sales, the company stated in its unaudited financial statement.
BUA Foods‘ Sugar segment grew to ₦196.5 billion in H1 2023 from ₦109.1 billion in H1 2022 while the flour division contributed ₦86 billion to the company’s revenue, an improvement from ₦33.9 billion recorded in H1 2022.
The Pasta segment also played a significant role in the overall revenue surge, generating ₦37.9 billion in H1 2023 from ₦25.8 billion filed in H1 2022.
Another crucial driver of BUA Foods’ revenue growth was the revamped rice division, which contributed ₦466 million to the company’s top line during the same period. The strategic focus on selling price adjustments, coupled with a notable increase in sales volume and an expanding export market, bolstered the company’s revenue in the period under review.
While the revenue milestone is commendable, BUA Foods also faced challenges in managing its cost of sales, which rose by 61.1% to ₦188.1 billion in H1 2023 compared to ₦116.7 billion in H1 2022. The surge in the cost of sales was primarily driven by escalating raw materials costs, increased factory expenses, and higher energy costs.
However, despite these challenges, the company managed to achieve a remarkable 155% increase in gross profit, soaring to ₦132.8 billion in H1 2023 from ₦52.1 billion in H1 2022.
To support its ambitious sales expansion plans and accommodate the surge in sales volume, BUA Foods allocated additional resources to selling and distribution expenses, resulting in an over 200% increase to ₦12.8 billion in H1 2023 from ₦4.2 billion in H1 2022.
The company also reported a 164.5% rise in administrative expenses, amounting to ₦5.0 billion in H1 2023 compared to ₦1.89 billion in H1 2022.
It is important to note that this increase included higher salaries and wages, which grew by 114% to ₦1.15 billion and other general expenses, which surged by 362% to ₦0.69 billion. Bank charges constitute ₦864 million, adding to the overall administrative expenses.
Despite the challenges faced, BUA Foods managed to achieve a 147.61% growth in operating profit of ₦115.8 billion in H1 2023 from ₦46.8 billion in H1 2022. This feat was attributable to strategic initiatives, including price adjustments, local market expansion efforts, and an increasing presence in export sales.
Also, the company’s operating profit margin appreciated significantly by 839 basis points to 36.1% in H1 2023 from 27.7% in H1 2022.
Moreover, BUA Foods’ profit before tax rose by 156% to ₦109.4 billion in H1 2023 from ₦42.7 billion in H1 2022. The company maintained a strong double-digit profit margin at 34.1%, as compared to 27.7% in the corresponding half-year period.
In terms of financial performance, BUA Foods achieved an outstanding 142% growth in profit after tax, reaching ₦95.2 billion in H1 2023 from ₦39.3 billion in H1 2022.
Earnings per Share (EPS) also surged by 142.6% to ₦5.29 in H1 2023, up from N2.18 filed in the corresponding period.
Commenting on the results, Engr. Ayodele Abioye, the Managing Director, said: “BUA Foods Plc continues to deliver solid growth across key business metrics in spite of social economic and political headwinds.
We have sustained returns by consistently executing our unique business strategy through a strong value proposition, expanding frontiers from a market and product offering standpoint with a view to sustain profitable leadership in our sector to create long term value for our stakeholders.
Whilst the impact of foreign exchange loss in H1 has not been significant due to our supply chain hedging strategy, we anticipate a material effect in H2 which will be adequately provisioned for.
However, our business resilience continues to assure impressive margin growth driven by increasing production capacity and capabilities.“
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Dangote Industries Limited Reaffirms Commitment to Bolstering Employment Opportunities for Nigerians
Dangote Industries Limited has underscored its unwavering dedication to fostering employment opportunities and advancing the cause of decent work for the Nigerian populace.
Dangote Industries Limited has reiterated its steadfast investment in critical sectors of the nation’s economy to facilitate job creation and stimulate the growth of meaningful employment.
Speaking during the induction ceremony of a new cohort of graduate trainees, Mr. Aliko Dangote, the President of Dangote Group, highlighted the company’s transformative journey from a commodity trading entity to a manufacturing powerhouse.
This evolution is a testament to their unwavering mission to contribute significantly to Nigeria’s industrial development, consequently positioning the nation prominently in the African industrial landscape.
“The core mission of our group is to improve the lives of the people by addressing their fundamental needs. This noble objective can only be achieved through the production of essential goods that cater to the needs of our people. This is why we have made massive investments across various sectors of the economy,” stated Mr. Dangote.
Mr. Dangote further emphasized the pivotal role that manufacturing plays in meeting the needs of the populace and its potent ability to combat poverty by creating job opportunities.
He commended the ongoing graduate trainee program as a tangible manifestation of their commitment to employment generation, recognizing its positive impact on the lives of countless individuals.
In a strategic move aimed at fulfilling their goal of job creation and addressing the basic needs of the Nigerian people, Mr. Dangote revealed that his Group has expanded its business portfolio with three significant investments valued at over $20 billion.
These investments encompass the refinery, petrochemical, and fertilizer sectors, with the potential to not only bolster the nation’s economy but also reinvigorate Nigeria’s foreign exchange reserves.
Also, these initiatives are anticipated to generate approximately $16 billion in foreign exchange earnings and offer an impressive aggregate of 250,000 jobs, thereby contributing to the reduction of youth unemployment in the country.
Dangote Industries Limited remains unwavering in its commitment to making substantial contributions to Nigeria’s industrial landscape, and its dedication to providing employment opportunities that uplift the lives of Nigerians is undeniably resolute.
The Group’s continuous investments in critical sectors reflect a steadfast commitment to shaping a brighter future for both the nation and its people.
Gas Retailers Issue Warning: Cooking Gas Prices Could Soar to N18,000 by December
Gas retailers are sounding the alarm, cautioning that the price of a 12.5kg cooking gas cylinder may skyrocket to N18,000 by December if the Federal Government does not take swift action to regulate the activities of terminal owners.
Olatunbosun Oladapo, President of the Nigerian Association of Liquefied Petroleum Gas Marketers, disclosed this during an interview on Sunday.
He revealed that the price of Liquefied Petroleum Gas (LPG), commonly known as cooking gas, has increased substantially at terminals.
The cost has surged from a range of N9-N10 million per 20 metric tons to an alarming N14 million per 20 metric tons.
Olatunbosun warned, “There is an outrageous surge in gas prices happening right now, and I am apprehensive that if the Federal Government fails to intervene and oversee the activities of these terminal owners, prices could skyrocket to as high as N18 million per metric ton by December. This would mean that a 12.5kg cylinder could cost as much as N18,000.”
According to him, terminal owners are using the excuse of high foreign exchange rates to justify their price increases, ultimately adding to the burden of the masses.
Olatunbosun however stated that there is no justifiable reason for this price hike, as the Nigerian Liquefied Natural Gas Limited (NLNG) continues to supply the market.
He explained, “NNPCL currently purchases 59 percent of the gas produced by NLNG, even though NLNG has raised its prices from N6 million to N8 million. Now, due to NLNG’s price hike, NNPCL and terminal owners have pushed prices to N14 million.”
He also pointed out that the impending price increase is not the fault of retailers but rather lies with NLNG and terminal owners.
He revealed that just last week, gas was selling at N800 per kilogram at the terminal, but it has now risen to N1,200 and could potentially reach N1,500 by December if immediate action is not taken.
Olatunbosun lamented, “Now, the average person will struggle to afford gas. How many minimum wage earners can afford gas now? People are resorting to firewood and charcoal. What is surprising is that they met with President Tinubu last week and pledged to collaborate with his administration to improve lives. Now, they have gone back on their word. Where are the promised palliatives and buses? We have not seen anything.”
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