• Wednesday, May 29, 2024
businessday logo

BusinessDay

Nigeria’s FMCGs face cashflows challenge in nine months

Nigeria’s FMCGs face cashflows challenge in nine months

Nigeria’s fast-moving consumer goods (FMCG) firms faced challenging macroeconomic environment which is characterised by rising inflation, high energy prices, interest rates, and weakened consumer purchasing power.

With these factors, some FMCG firms had to cut down their expenses to remain in business, just as some tweaked the size of their products. Amongst all the approaches employed by these firms to stay afloat, some firms braced against all odds to record positive cash flows in their activities during the third quarter ended September 30, 2022.

BusinessDay analysed the financial results of Nestle, Nigerian Breweries, Dangote Sugar, International Breweries, NASCON, Cadbury, and BUA Foods which revealed that BUA Foods, Dangote Sugar, and International Breweries ranked as the top three with the highest net cash flows in operations in the nine months ended September 2022.

Further analysis showed that International Breweries led its peers with a positive net cash flow from investing activities of N5.13 billion, while other firms recorded negative cash flows during the period under review.

Nigerian Breweries, Nestle, and Cadbury reported the highest positive net cash flow from financing activities of N77.12 billion, N12.46 billion, and N5.2 billion respectively.

Company analysis

BUA Foods

BUA Foods recorded the highest net cash flow from operating activities which stood at a positive of N104 billion in the nine-month period ended September 2022, a huge 333 percent increase from N24 billion in the corresponding period of 2021.

The net cash flow from investing activities recorded a negative cash flow of N7.05 billion from as against a negative cash flow of N4.22 billion in the corresponding period of 2021.

BUA Foods’ net cash flow from financing activities stood at a negative N93.75 billion in September 2022 from a negative N27.35 billion in the same period of 2021.

The food manufacturer saw its turnover jump 20 percent in September 2022 from N241 billion in September 2021. The firm’s cost of sales grew by 23 percent to N195.6 billion from N158.8 billion in the comparable period in 2021.

Profit after tax climbed 17 percent to N68.7 billion in September 2022, from N58.7 billion in September 2021. Earnings per share rose to N3.82 from N3.26 in the comparable period in 2021.

Dangote Sugar

Dangote sugar’s net cash flows from operating activities grew by 14.3 percent to N88 billion as of September 2022 from N77 billion in the corresponding period of 2021.

The firm’s net cash flow from investing activities stood at a negative of N9.46 billion in the nine months of 2022, this is coming from a negative of N40.66 billion in the same period of 2021.

Dangote Sugar’s net cash flow from financing activities amounted to negative N12.30 billion as of September 2022 compared to negative N19.81 billion cash flow in similar period in 2021.

The firm’s revenue surged to N288.3 billion in September 2022, up 47.4 percent from N195.5 billion in September 2021. Dangote Sugar’s cost of sales grew to N230.8 billion in September 2022, up 45.4 percent from N158.7 billion in September 2021.

The firm’s profit for the year jumped 60 percent to N24.8 billion from N15.5 billion in the period reviewed. Basic earnings per share stood at N2.04 from N1.28 in the comparable period.

Read also: 10 banks with highest loan book growth in 2022

International Breweries

International Breweries’ net cash flows from operating activities dropped to N20.16 billion as of September 2022 compared to N40.6 billion in the corresponding period of 2021.

The brewery saw its net cash flow from investing activities at N5.13 billion from negative N3.70 billion in the comparable period of 2021. The firm’s net cash flow from financing activities stood at N67.24 billion in 2022 from negative N5.33 billion at the end of third quarter of 2021.

The brewery recorded revenue of N160.4 billion at the end of the third quarter of 2022, indicating a 25 percent increase from N128.4 billion in the comparable period of 2021. The firm’s cost of sales climbed 14 percent to N113.4 billion in September 2022 from N99.6 billion in September 2021.

The brewery saw its profit for the period at N2.81 billion, an 80 percent dip from N14 billion in the comparable period of 2021. International Breweries’ basic earnings per share stood at N0.10 down from N0.52 in 2021.

Nestle Nigeria

Nestle Nigeria’s net cash flows from operating activities dipped to N5.57 billion as of September 2022, indicating a 91.7 percent decrease from N67.12 billion in same period in 2021.

The firm saw its net cash flow from investing activities end at negative N11.41 billion at the end of the third quarter of 2022 from negative of N6.69 billion in corresponding period of 2021.

Nestle’s net cash flow from financing activities stood at N12.46 billion from negative N2.52 billion in same period in 2021. Nestle’s revenue grew 27.4 percent to N333.4 billion in the nine-month ended September 2022 from N261.6 billion in the same period of 2021.

The firm’s cost of sales increased by 35 percent to N216.2 billion in September 2022 from N160.3 billion in the comparable period of 2021.

Nestle recorded a profit after tax of N40.15 billion in September 2022, indicating a 19.5 percent increase from N33.6 billion in September 2021. Basic earnings per share stood at N50.66 from N42.37 in the period under review.

NASCON

NASCON’s net cash flows from operating activities stood at N4.97 billion in the nine months ended period September 2022, from negative N1.55 billion in similar period in 2021.

The saltmaker’s net cash flow from investing activities was at negative N0.98 billion as of September 2022 from negative N0.4 billion in the same period of 2021.

NASCON’s net cash flow from financing activities recorded N0.40 billion from negative N1.61 billion in the period under review. The salt maker’s revenue increased by 62.4 percent to N40.6 billion in September 2022 from N25 billion in September 2021.

Its cost of sales grew by 67.3 percent to N25.1 billion in September 2022 from N15 billion in September 2021. NASCON’s profit for the period stood at N2.88 billion in September 2022, a 19.5 percent increase from N2.41 billion in September 2021.

Basic earnings per share stood at N145 from N122 in the reviewed period.

Cadbury Nigeria

Cadbury’s net cash flows from operating activities stood at N1.79 billion at the end of the third quarter of 2022, a 1,391 percent increase from N0.12 billion in similar period of 2021.

The firm reported N0.98 billion negative net cash flow from investing activities from negative cash flow of N0.41 billion in the corresponding period of 2021. Cadbury’s net cash flow from financing activities stood at N5.2 billion, amounting to 11.5 percent decline from N5.88 billion in the comparable period of 2021.

The firm saw its revenue jump 41.6 percent to N42.5 billion in September 2022 from N30 billion in the comparable period of 2021. Cadbury’s cost of sales rose to N34.1 billion in September 2022, indicating a 39.7 percent increase from N24.4 billion in September 2021.

Its profit for the period stood at N2.81 billion in September 2022, indicating an 86 percent increase from N1.51 billion in September 2021. Basic earnings per share stood at N149.97, up from N80.57 same period in 2021.

Nigerian Breweries

Nigerian Breweries recorded negative net cash flows from operating activities of N26.85 billion by September 2022 from N30.94 billion positive cash flow in the corresponding period of 2021.

The brewery’s net cash flow from investing activities stood at negative N52.30 billion from negative cash flow of N25.60 billion by September of 2021.

Nigerian Breweries’ net cash flow from financing activities was N77.12 billion as of September 2021 from negative N23.93 billion in similar period of 2021. The brewery’s net revenue jumped 27.2 percent to N393.4 billion in September 2022 from N309.3 billion in the comparable period of 2021.

Its profit after tax stood at N14.7 billion in September 2022, indicating a 79.2 percent increase from N8.2 billion in September 2021. Basic earnings per share stood at N182 from N102 in same period in 2021.