• Friday, September 29, 2023
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BUA Foods’ annual profit rises 31% to N91bn

BUA Foods’ annual profit rises 31% to N91bn

BUA Foods Plc has posted a profit after tax of N91.3 billion for the financial year 2022, a 31 percent increase from N69.8 billion in 2021.

This results in a 100 basis-point increase in net profit margin to 22 percent from 21 percent in the reviewed period.

The firm’s revenue from contracts with customers grew 26 percent to N418.3 billion, driven largely by sales of non-fortified sugar, which contributed N145.2 billion, sales of fortified sugar (N129.2 billion) and sales of bakery flour (N79.7 billion).

Other line items that contributed to the overall revenue are sales of pasta, sales of bran and sales of molasses, which accounted for N57.2 billion, N6.3 billion and N743.03 million in 2022.

The firm’s cost of sales increased by 24 percent to N285.6 billion, which is largely attributable to cost of raw materials consumed and factory production overhead.

“The high input cost environment and further devaluation of the naira against the US dollar weighed heavily on prices for raw materials. This resulted in a higher cost of production,” BUA Foods said in an earnings release statement.

Its gross profit climbed 29 percent to N132.8 billion in 2022 from N103 billion in 2021, leading to a 32 percent gross margin, up from 31 percent in the previous year.

The firm’s operating profit rose to N117.5 billion, up 47 percent from N79.9 billion, which resulted in its operating profit margin of 28 percent in 2022, a 400 basis-point increase from 24 percent in 2021.

On the back of 166 percent increase year-on-year in other selling and marketing expenses and 37 percent increase in haulage expense, selling and distribution cost increased to N14.2 billion, up 41 percent from N10.1 billion in the comparable period.

Return on assets grew to 69 percent in 2022 from 56 percent in 2021 while BUA Foods’ return on equity stood at 181 percent, up from 166 percent in the period reviewed.

BUA Foods’ quick ratio stood at 81 percent in 2022, compared to 72 percent in 2021. Its current ratio rose to 91 percent from 79 percent in the comparable period.

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On the back of rising interest rates during the period reviewed, net finance costs surged to N8.7 billion from N2.2 billion, representing a 295 percent year-on-year increase.

BUA Foods’ debt-to equity ratio dropped to 80 percent from 109 percent while its debt ratio was at 35 percent, down from 41 percent.

Cash and cash equivalents stood at N27.7 billion in 2022, a 0.7 percent increase from N27.5 billion in 2021. Movement in the firm’s cash and cash equivalents revealed net cash generated from operating activities amounted to N124.5 billion, a 43 percent increase from N871.7 million in 2021.

Net cash used in investing activities recorded a negative cash flow of N15.4 billion, down from N104.4 billion negative cash flow in the comparable period, while net cash generated from financing activities recorded a negative of N108.8 billion as against a positive cash flow of N114.8 billion.

Earnings per share increased to N5.07 per share from N4.24 in the comparable period.