Revenues from Sugar and Flour segments lifted BUA Food’s earnings to an impressive performance as the company announced a profit after tax of N91.34 billion in 2022, up from N69.77 billion reported in 2021.
Its audited financial statement for the year ended, December 31, 2022, shows that the company’s revenue jumped to N418.35 billion in the year under review, indicating a 26 percent increase from N333.27 billion in 2021. However, the cost of sales rose by an almost equal percentage (23 percent).
In addition, Profit before tax increased by 38.4 percent to N107.23 billion in 2022 up from N77.47billion in 2021, as the profit before tax margin increased by 25.6 in 2022 from 23.24 percent in 2021 due to an increase in revenue.
Consequently, the Board of Directors has recommended an N4.50k dividend per ordinary share of 50 kobos each, higher than the N3.50k dividend paid in 2021. Thus, the group’s Earnings Per Share (EPS) improved to N5.07 in 2022, up from N4.22 in the corresponding period.
The audited account showed that revenue from the Sugar segment accounted for the bulk of the company’s earnings. Sugar (Non-fortified) accounted for N145.16 billion, representing an increase of 83 percent from N79.15 billion in 2021, while Sugar (Fortified) accounted for N129.24 billion, a decline of 0.45 percent from N129.84billion recorded in 2021.
An analysis of the result showed that the growth in BUA Foods’ sugar revenue was driven by price adjustments and export sales within the period.
The Flour division, specifically Bakery Flour revenue accounted for N79.68 billion, up from N64.19 billion in 2021, while Pasta raked in N57.24 billion in revenue up from N54.4 billion reported in 2021. In addition, sales from Wheat Bran rose 19.4 percent to N6.26 billion in 2022, from N5.24 billion in the previous year.
Nigeria accounted for 86 percent of the Group’s revenue as against 100 percent in 2021, indicating that the company is making inroads into offshore markets.
In the period under review, the cost of sales jumped by 23 percent (almost equal percentage with revenue) to N285.56 billion as against N230.3 billion in 2021 driven by a 23 percent increase in the cost of raw materials which rose to N260.18 billion in 2022 from N211.21 billion in the previous year.
According to the result, “high input cost environment and further devaluation of the Naira against the Dollar weighed heavily on prices of raw materials in nine months of 2022 and resulted in higher cost of production.”
The cost of raw materials accounted for 91.11per of cent cost of sales in 2022 against 91.7 percent in 2021. Similarly, sales and distribution expenses rose to N14.19 billion in 2022 from N10.14 billion in 2021 due to a huge increase in the cost of diesel within the period.
In the period under review, gross profit rose 58 percent to N132.79 billion from N102.96 billion, while total operating expenses increased by 33 percent to N32.92 billion in 2022 up from N24.76billion in 2021 as a result of an increase in the cost of selling and distribution to customers.
However, operating profit grew by 47 percent to N117.49 billion in 2022 from N79.89 billion in 2021, due to lower administrative expenses at N18.13 billion as against N14.63 billion in 2021.
Finance charges increase by 72.7 percent to N8.72 billion in 2022 as against N5.05 billion reported in 2021, due to an efficient funding mix along business transactions.
Total assets increased by 2.32 percent to N607.22billion in 2022 audited results from N593.46billion reported in the 2021 full financial year, driven largely by growth in trade and other receivables (+128per cent; 20 percent of total assets). Inside Business