BUA Foods announces 64% growth in profit to N77.5bn

BUA Foods Plc has declared 64 per cent increase in profit before tax to N77.5billion in audited financial statement for the full year ended December 31, 2021 from N47.25billion reported in the year ended December 31, 2020.

The food processing company, listed on the Nigerian Exchange Limited (NGX) also announced 97per cent increase in profit after tax to N69.8 billion in 2021 from N35.4 billion reported in 2020.

Amid growth in profits, the Board of Directors recommended for the approval of shareholders, a payment of N3.50k dividend per 1 ordinary share of 50 kobo each, out of the profits declared in the financial year ended 31 December 2021.

Key factors that drive growth in profits are significant increase in revenue and finance income. For the financial year under review, BUA Foods reported 73 per cent increase in revenue to N333.27billion as against N192.86billion in 2021, while finance income closed 2021 at N2.89billion from N30.99million reported in 2020.

Analysts at CSLStockbrokers, had maintained that BUA Foods has an excellent and well diversified product portfolio to compete with peer rivals in the FMCG Industry, which makes its share price attractive because of expected sales and profit growth.

“It has a 1.5million MTPA combined sugar production capacity, eight ultramodern factories for producing rice, sugar, pasta, flour and 20,000 hectares of arable land located in Lafiagi, Kwara State. The new consumer goods firm has two ultra-modern and automated sugar refineries (BUA Sugar Refinery, Lagos and Eastern Sugar Refinery, Port Harcourt) with a combined installed refining capacity of 1,500,000 metric tonnes.

“BUA is the only sugar refiner to have refining capabilities outside Lagos, Nigeria. In response to Nigeria’s backward integration policy in the sugar industry, BUA Group acquired the LASUCO in Kwara State in 2008 and established the Bassa Sugar Company in Kogi State,” the analysts said.

They explained that BUA Foods is poised to create a more competitive arena as it has established a state-of-the art plant in Port Harcourt, to cater to the growing needs of fast-growing young population who crave for consumption.

The food businesses that were merged into BUA Foods are: BUA Sugar Refinery Limited; BUA Rice Limited; BUA Oil Mills Limited; IRS Flour and IRS Pasta.

According to the group, the consolidation became necessary to maintain its market leadership in the agribusiness and food processing sector as well as take advantage of the growth opportunities in the economy and the export prospect presented by the African Continental Free Trade Area (AfCFTA).

Chairman of BUA Group, who doubles as Chairman of BUA Foods, Alhaji Abdul Samad Rabiu, had said: “We have perhaps the largest food business in Nigeria and the West African sub-region. To realise our full potential as a business as we drive the food security needs of the country, we recently consolidated our food businesses under a single entity to be known as BUA Foods.”

He noted that the restructuring will enable “us to be nimbler and more responsive to the food needs of the population as we continue to build a sustainable business.”