Six listed food and beverage manufacturers in Nigeria saw their combined sales rise by 73.4 percent in the first three months of 2024 despite the rising inflationary pressures.
BusinessDay analysis of the latest financial statements of BUA Foods Plc, Nestle Nigeria Plc, Dangote Sugar Refinery Plc, Unilever Nigeria Plc, NASCON Allied Industries Plc, and Cadbury Nigeria Plc shows that their total revenue grew to N742.5 billion from N428.3 billion in the first three months of 2023.
Further analysis reveals that the 73.4 percent growth in Q1 is higher than the 26.4 percent in the same period of 2023.
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“Our top and bottom line witnessed a significant uptick facilitated by a mix of volume and pricing actions. Aggregated sales maintained its upward trajectory as our capacity expansion drive continues to yield notable gains,” Ayodele Abioye, managing director at BUA Foods, said in a statement.
He said despite elevated input and output cost pressures and increased FX volatility, our first quarter results further re-iterated the resilience of our business model and the dynamism of our market approach.
“During the quarter, we expanded our product bouquet in a bid to penetrate new markets and fulfill the demands of our customers and consumers,” Abioye said.
Nigeria’s headline inflation rate rose for the 16th straight month to 33.69 percent in April from 33.20 percent in March, according to the recent consumer price index report by the National Bureau of Statistics (NBS).
NBS stated that the acceleration in headline inflation was driven by food and non-alcoholic beverages. Food inflation also rose to 40.53 percent, compared to an increase of 40.01 percent.
Although the six food producers recorded revenue increases, three of them recorded an improvement in their after-tax profits, while the other three recorded losses driven by further devaluation of the naira.
BUA Foods recorded an increase in after-tax profit of N55.82 billion from N40.47 billion, Unilever Nigeria recorded an after-tax profit of N3.36 billion, up from N2.67 billion and NASCON recorded a decline in after-tax profit to N1.23 billion from N1.64 billion.
Nestle Nigeria reported an after-tax loss of N142.7 billion from a profit of N16.21 billion, Dangote Sugar Refinery posted an after-tax loss of N68.9 billion from a profit of N12.8 billion while Cadbury had an an after-tax loss of N7.32 billion from a profit of N3.45 billion.
Analysis of individual firms
BUA Foods
BUA Foods recorded the highest revenue growth of 147.3 percent to N356.9 billion in the first quarter of 2024 from N144.31 billion in the same period of 2023.
The firm’s cost of sales grew to N241.5 billion from N87.66 billion and selling and distribution expenses grew to N9.78 billion from N6.29 billion.
BUA Foods is a food and fast-moving consumer goods business, which processes, manufactures, produces, and distributes food materials such as sugar, flour, pasta, rice, and edible oils as well as packaged foods. The company’s products currently include fortified and non-fortified sugar, flour for large and small-scale use, and pasta.
Unilever
Unilever Nigeria recorded 57.8 percent growth in revenue to N32.31 billion in the first quarter of 2024 from N20.47 billion in the same period of 2023.
The firm’s cost of sales grew to N18.8 billion from N10.8 billion while selling and distribution expenses increased to N1.4 billion from N908.6 million.
Unilever is a publicly listed company with trading and manufacturing interests in the consumer goods market. In 2014, it was listed among the top 20 most valuable companies quoted on the Nigerian Stock Exchange. It is a subsidiary of Unilever Overseas Holding B.V.
Nestle
Nestle Nigeria recorded a 43.4 percent growth in revenue to N183.4 billion in the first quarter of 2024 from N127.9 billion in the similar period of 2023.
The firm’s cost of sales surged to N134.4 billion from N76.32 billion and marketing and distribution expenses rose to N19.74 billion from N19.34 billion.
Nestle is a publicly listed food and beverage specialty company headquartered in Lagos. It’s mostly owned by a holding company based in Switzerland and has ties to the company Tolaram Group. The company was founded in 1961 and conducted trading under the name of Nestle Products Nigeria Limited.
Cadbury
Cadbury Nigeria recorded a 43 percent growth in revenue to N23.6 billion in the first quarter of 2024 from N16.5 billion in the same period of 2023.
The firm incurred N18.7 billion cost of sales from N10.2 billion while selling and distribution expenses grew to N1.48 billion from N1.56 billion.
Cadbury manufactures and markets a range of chocolate malt drink mixes, sweets, powder beverages, and chewing gums in Nigeria. The company was established in the 1950s to source cocoa beans from Nigeria for the Cadbury Group; it then branched into re-packing imported bulk products and grew rapidly into a fully-fledged manufacturing operation producing a range of popular Cadbury brands.
NASCON
NASCON Allied Industries recorded a 39.7 percent growth in revenue to N23.61 billion in the first quarter of 2024 from N16.9 billion in the same period of 2023.
The cost of sales grew to N12.46 billion from N9.95 billion while distribution costs increased to N4.99 billion from N3.47 billion.
NASCON is a Nigeria-based company that is engaged in the processing of raw salt into refined, edible, and graded salt. The Company’s products include salt, seasoning, and spices.
Dangote Sugar Refinery
Dangote Sugar Refinery recorded a 20.1 percent growth in revenue to N122.7 billion in the first quarter of 2024 from N102.2 billion in the same period of 2023.
The firm’s cost of sales grew to N113.9 billion from N76.5 billion while selling and distribution expenses dropped to N151.2 million from N174.6 million.
Dangote Sugar Refinery, established in 1999 and commencing operations in 2000, is a leading agribusiness firm specialising in refining raw sugar into edible, fortified, and non-fortified granulated white sugar. Based in Lagos, Nigeria, with a robust annual production capacity of 1.44 million metric tons, the company is committed to Nigeria’s self-sufficiency in sugar production.
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