BUA Foods proposes N5.50 final dividend as profit grows to N112.1bn

…stock hits 52-week high

BUA Foods Plc has proposed a final dividend of N5.50 per ordinary share of 50 kobo each, subject to appropriate withholding tax and approval. This final dividend will be paid to shareholders whose names appear in the Register of Members as at the close of business on August 23, 2024.

BUA Foods Plc recently announced its audited financial results for the twelve months period ended December 31, 2023 which shows Profit After Tax (PAT) grew by 23percent to N112.1billion while turnover grew by 74percent to N729.4billion.

BUA Foods said in the corporate action announcement that on September 26, 2024, dividends will be paid electronically to shareholders whose names appear on the Register of Members as at August 23 and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

The company’s share price at N379.9 shows it trades at a 52-week high as against a 52-week low of N102.6

Here are key highlights of the group performance and financial review of twelve months’ audited results

Revenue grew by 74percent year-on-year (y-o-y) to N729.4 billion in 12M 2023 (12M 2022: N418.3 billion). This was due to a y-o-y increase of 54percent in Sugar to N422.5 billion (12M 2022: N275.2 billion), 152percent in Flour to N216.9 billion (12M 2022: N85.9 billion), and 54eprcent in Pasta to N87.9 billion (12M 2022: N57.2 billion).

Increase in cost of sales (+64percent) to N468.98 billion in 12M 2023 (12M 2022: N285.55 billion) was driven by an increase in raw materials cost and energy cost. 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 higher cost of production.

While commenting on the results, Ayodele Abioye, Managing Director, BUA Foods said: “2023 witnessed a very challenging operating environment characterized by macroeconomic headwinds.

“We were able to navigate these challenges leveraging our unique strategic business model to deliver a strong performance as top line grew by as much as 74percent, with gross profit leaping by 96percent while total assets increased significantly. This is a reaffirmation of our commitment to drive shareholder value underpinned by our unique capabilities as a strong, diversified and scalable food business”.

“Expansion efforts across all frontiers continues to crystallise in supporting growth as we accelerate our strategy to become a leading food brand on the continent. We continue to drive efficiency through our integrated supply chain system by leveraging economies of scale in alignment with market expansion efforts towards fulfilling the increasing demand of customers.

“Looking ahead, we remain committed to unlocking opportunities for sustained and improved business performance while being confident in our strategic plans for the year 2024. Creating long-term value for all stakeholders is an imperative, even as we stay true to our creed of nourishing lives,” Abioye said.

Gross profit increased by 96percent to N260.45 billion in 12M 2023 (12M 2022: N132.79 billion) even as gross profit margin appreciated by 400 basis points (bps) to 35.7percent in 12M 2023 (12M 2022: 31.7percent) due to the slight selling price adjustment within the year.

Selling and distribution expenses increased by 110percent to N29.84 billion in 12M 2023 (12M 2022: N14.1 billion) due to huge increase in cost of diesel within the period. Administrative expenses also declined by 8percent to N17.21 billion in 12M 2023 (12M 2022: N21 billion).

Total operating expenses increased by 43percent to N47.06 billion in 12M 2023 (12M 2022: N32.9 billion) on the back of increase in selling and distribution cost along the supply chain to customers. EBITDA increased by 74percent to N215.6 billion in 12M 2023 (12M 2022: N124.1 billion), driven by growth in gross profit. Also, EBITDA margin appreciated by 20 basis points (bps) to 29.6percent in 12M 2023 (12M 2022: 29.4percent).

Operating profit grew by 75percent to N206.3 billion in 12M 2023 (12M 2022: N117.4 billion) benefitting from top line growth driven by price adjustment and volume increase due to capacity expansion for our flour and pasta business. Operating profit margin appreciated by 20bps to 28.2percent in 12M 2023 (12M 2022: 28percent).

Finance fees grew by 1031percent to N98.18 billion in 12M 2023 (12M 2022: N8.68 billion) largely driven by FX losses within the period. Profit before tax increased by 8percent to N108.12 billion in 12M 2023 (12M 2022: N107.2billion), however, profit before tax margin dropped to 15percent.

Profit after tax grew by 23percent to N112.09 billion in 12M 2023 (12M 2022: N91.3 billion). while the Earning per Share (EPS) grew by 23percent to N6.23 in 12M 2023 from N5.07 in the corresponding period. Total assets increased to N1.070 trillion as of 12M 2023 (FY 2022: N607.2 billion) driven largely by strategic transactions in trade and other receivables as well as forex valuations.

Total liabilities increased by 115percent to N808.3 billion as of 12M 2023 (FY 2022: N376.2 billion). Total equity increased by 13percent to N262.05 billion as of 12M 2023 (FY 2022: N376.2 billion) mainly due to a significant growth of 14percent in retained earnings to N254.1 billion as of 12M 2023 (FY 2022: N222.9 billion).