BUA Foods Plc (NGX: BUAFOODS) recorded double-digits growth in both revenue and profit after tax for the first quarter ended March 2021.
Revenue grew by 60.2% q-o-q to ₦144.3 billion in Q1 2023 (Q1 2022: ₦90.1 billion). This was due to a q-o-q increase of 71.7% in Sugar to ₦93.2 billion (Q1 2022: ₦54.2 billion), 57.8% in Flour to ₦31.2 billion (Q1 2022: ₦19.8 billion), and 21.8% in Pasta to ₦19.4 billion (Q1 2022: ₦15.9 billion). New division Rice business contributed ₦384 million to the top line same period.
Further break down of the revenue showed that the Sugar division contributed 64.6% to revenue in Q1 2023 (Q1 2022: 60.4%). The Flour division contributed 21.7% to revenue in Q1 2023 (Q1 2022: 22%). The Pasta division contributed 13.4% to revenue in Q1 2023 (Q1 2022: 17.6%) While the Rice division as new entrance to the business contributed 0.3% valued at ₦0.38 billion to revenue in Q1 2023.
Increase in cost of sales (+41.9%) to ₦87.6 billion in Q1 2023 (Q1 2022: ₦61.7 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.
Gross profit increased by 100% to ₦56.6 billion in Q1 2023 (Q1 2022: ₦28.3 billion) even as gross profit margin appreciated by 790bps to 39.3% in Q1 2023 (Q1 2022: 31.4%) due to the slight selling price adjustment and new market coverage for sales within the year.
Selling and distribution expenses increase by 787% to ₦6.3 billion in Q1 2023 (Q1 2022: ₦0.7 billion) due to increase in cost of diesel impacting within the period and revised focus on aggressive sales strategy to push volume.
Administrative expenses also increased by 72.4% to ₦2.6 billion in Q1 2023 (Q1 2022: ₦1.5 billion) driven majorly by the increase in general expenses (128.2%) to ₦530.2 million in Q1 2023 (Q1 2022: ₦232.4 million). Others key highlights includes Diesel and Fuel (75.4%) and Bank Charges of ₦473 million.
Operating profit grew by 81.7% to ₦48.1 billion in Q1 2023 (Q1 2022: ₦26.5 billion) benefitting from top line growth driven by price adjustment, local market expansion and our export sales. Operating profit margin appreciated by 400bps to 33.4% in Q1 2023 (Q1 2022: 29.4%).
Profit before tax increased significantly by 85% to ₦45.9 billion in Q1 2023 (Q1 2022: ₦24.8 billion) while sustaining her double digit in profit before tax margin at 31.8 from 27.6% in comparable quarters.
Profit after tax grew by 77.1% to ₦40.4 billion in Q1 2023 (Q1 2022: ₦22.8 billion). while the Earning per Share (EPS) grew by 77% to N2.25 in Q1 2023 from N1.27 in the corresponding period.
Balance sheet
Total assets increased by 6.9% to ₦649.6 billion as of Q1 2023 (FY 2022: ₦607.2 billion) driven largely by growth in retained earnings of 18.1% at ₦263.3 billion from ₦222.9 million at FY 2022.
Total liabilities increase slightly by 0.5% to ₦378.2 billion as of Q1 2023 (FY 2022: ₦376.2 billion). This was driven mainly by trade and other payables amidst other current liabilities surge by 37.5% to ₦50.5 billion from ₦36.7 billion in FY 2022.
Total equity increased by 17.5% to ₦271.4 billion as of Q1 2023 (FY 2022: ₦230.9 billion) mainly due to a significant growth of 18.1% in retained earnings to ₦263.3 billion as of Q1 2023 (FY 2022: ₦222.9 billion).
The equity price closed at N114 per share on Wednesday on the Nigerian Exchange. YTD it is up 58.44%.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.
