BUA Foods Plc has reported record-breaking results for its 2024 financial year, with revenue crossing the trillion-naira mark for the first time, and profits rising sharply on the back of strong performance across its product segments.
According to the company’s audited financial statements for the year ended December 31, 2024, BUA Foods recorded revenue of N1.527 trillion, more than double the N729.4 billion it reported in 2023.
This represents a 109.5% year-on-year increase and marks the highest annual revenue in the company’s history since listing on the Nigerian Exchange in 2021, when it reported N333.2 billion in topline revenue.
Pre-tax profit also soared by 162.9% to N284.32 billion, while profit after tax grew 137.3% to N265.99 billion — cementing BUA Foods’ position as one of Nigeria’s most profitable consumer goods companies.
This is despite recording a N178 billion exchange loss as currency depreciation spiked interest obligation costs.
The strong performance, however, is attributed to solid demand for the company’s core products — sugar, flour, and pasta — as well as increased production capacity, strategic pricing, and deeper market penetration across Nigeria.
These contributed to the astronomic rise in revenues, which helped boost margins.
Flour drives record earnings
While sugar remains BUA Foods’ top-selling product, the company saw a significant boost from its flour segment, which grew by a massive 171% year-on-year.
- This segment contributed over N541 billion to revenue in 2024, accounting for 35.5% of total sales — up from 27.4% the previous year.
- The growth in flour sales is linked to rising demand from Nigeria’s bakery industry and small-scale food businesses, which rely heavily on affordable, locally produced flour.
- BUA Foods expanded its flour production lines in late 2023 to meet this growing demand, a move that has now clearly paid off.
Sugar, long the mainstay of BUA Foods’ business, brought in N734.5 billion, making up 48% of the total revenue.
- However, this marks a slight drop in contribution percentage, reflecting the company’s growing diversification and shift toward other product lines.
- The pasta segment contributed N197 billion to revenue, representing a 12.9% share.
- The company’s branded pasta products, launched two years ago, continue to gain traction, especially among price-sensitive consumers looking for alternatives to imported brands.
Strong local demand, higher dividend
Local sales accounted for 95.5% of the company’s total revenue in 2024, underlining BUA Foods’ dominance in the Nigerian market.
The company has continued to focus on serving the domestic market with competitively priced products, benefiting from rising food demand across the country despite broader economic pressures.
On the back of its strong performance, the Board of Directors has proposed a dividend of N13 per share — more than double the N5.50 paid in 2023.
This 136.4% increase reflects the company’s commitment to delivering value to shareholders and signals confidence in its long-term earnings potential.
Rising costs and forex impact
Despite the stellar topline and bottom-line performance, BUA Foods was not immune to the macroeconomic challenges of 2024.
- The company reported a significant increase in finance costs, driven primarily by a massive N173 billion in foreign exchange losses following the naira devaluation.
- Like many import-dependent manufacturers, BUA Foods faced higher raw material costs and currency-related pressures.
- Raw materials alone accounted for over 91% of its cost of sales. Still, the company managed to improve its operating profit margin to 31%, supported by lower impairment losses and tight control over expenses.
The company’s debt profile showed improvement, with total debt dropping to N391.85 billion, down from the previous year. Most of this remains short-term borrowing for import financing. The decline in debt helped reduce BUA Foods’ gearing ratio from a steep 210% in 2023 to a more manageable 81% in 2024.
Outlook
In August 2024, BUA Foods signed an agreement with IMAS, a Turkish flour milling equipment manufacturer, to construct four new wheat flour mills.
- When completed, this will increase the company’s total wheat flour milling capacity to 2.5 million metric tonnes annually.
- The move is expected to position BUA Foods as one of the largest flour millers in sub-Saharan Africa and enhance its ability to serve both industrial bakers and retail customers with higher volumes and improved quality.
In September, the company announced another bold step — a significant expansion of its pasta production line.
- It plans to add nine new long-cut pasta lines, which will nearly double annual pasta production capacity from 500,000 tonnes to 900,000 tonnes.
- This is expected to fuel new product innovations and boost volume growth, especially as demand for locally produced pasta continues to rise in Nigeria.
To support this scale-up in production, BUA Foods also partnered with another Turkish firm, Cukurova Silo, to expand its grain storage capacity by 100,000 tonnes.
- This added capacity is designed to ensure consistent access to raw materials, reduce supply chain disruptions, and enhance the company’s ability to operate efficiently year-round — a key requirement given Nigeria’s challenging logistics environment.
(Nairametrics)
