BUA Foods’ nine-month profit rises to N450 billion

Leading maker of sugar, pasta and edible oils, BUA Foods, recorded an 11.2 per cent year-on-year increase in net profit for the first nine months of the year, its unaudited financials published on Friday showed.

The company generated N1.1 trillion in turnover, down from N1.4 trillion a year ago, following weaker sales from its bakery flour and fortified sugar businesses.

That notwithstanding, the manufacturer sharply reduced its spending on raw materials by 37.2 per cent as a key strategy in bringing down cost of sales, which, in turn, helped lift gross profit by N32.2 billion to N552.9 billion.

Moreover, the strong performance was also driven by other cost-management measures.

Administrative expenses, for instance, dropped by more than one quarter to N22 billion, while selling and distribution expenses dropped by 15.4 per cent to N45 billion, easing cost pressures on operating profit.

BUA Foods is majority-owned by billionaire magnate Abdulsamad Rabiu, and carries a market value of N13.7 trillion.

In December 2021, the company announced the combination of its sugar, rice, oil, flour and pasta divisions into a single entity as it moved to leverage economies of scale in its food processing business.

In the period under review, EBITDA margin, a key performance indicator, jumped to 43.6 per cent from 31.3 per cent.

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Profit before tax accelerated by 11.1 per cent to N480.5 billion, while profit after tax climbed to N450.5 billion from N405.3 billion.

“Despite a 19% decline in revenue to ₦1.15 trillion, driven by softer pricing conditions and subdued consumer demand, we maintained a substantial improvement in profitability through effective cost optimisation, improved productivity, and rigorous execution across the business,” CEO Ayodele Abioye said in an earnings release document.

“Looking ahead, we remain focused on driving profitable growth, enhancing market penetration, and maintaining operational efficiency,” he added.