BUA Foods Announces N5.50 Dividend, Boosts Profit to N112.1 Billion

The Board of BUA Foods Plc has proposed a final dividend of N5.50 per ordinary share worth 50 kobo.

According to a notice sent to the Nigerian Exchange Limited (NGX), the final dividend will be paid to shareholders whose names appear in the Register of Members as of the close of business on August 23, subject to proper withholding tax and permission.

BUA Foods stated in the corporate action that the dividend will be paid electronically on September 26 to shareholders whose names appeared on the Register of Members as of August 23 and who completed the e-dividend registration and requested that the Registrar pay their dividends directly into their bank accounts.

The company also revealed its audited financial results for the 12-month period ending December 31, 2023, which showed a 23 percent increase in Profit After Tax (PAT) to N112.1 billion and a 74% increase in revenue to N729.4 billion.

The results also showed that the company’s sales increased by 74% year on year (y-o-y) to N729.4 billion in 2023, compared to N418.3 billion in 2022. This was attributable to a year-over-year increase of 54% in sugar to N422.5 billion, 152% in wheat to N216.9 billion, and 54% in pasta to N87.9 billion.

Commenting on the results, Ayodele Abioye, Managing Director of BUA Foods, stated, “2023 saw an extremely challenging operating environment typified by macroeconomic headwinds.

Abioye stated, “We were able to navigate these challenges by leveraging our unique strategic business model to deliver a strong performance, as top line grew by up to 74%, gross profit increased by 96%, and total assets increased significantly.” This is a reaffirmation of our commitment to increasing shareholder value through our unique skills as a strong, diverse, and scalable food company.

“Expansion activities across all frontiers continue to crystallise, supporting growth as we accelerate our strategy to become the continent’s top food brand. We continue to drive efficiency through our integrated supply chain system by leveraging economies of scale in conjunction with market growth activities to meet increasing client demand.

“Looking ahead, we are focused to unlocking prospects for sustained and enhanced business success, and we are confident in our strategic goals for 2024. Creating long-term value for all stakeholders is critical, even as we remain committed to our ideology of nourishing lives.”

Further study of the results revealed that gross profit climbed by 96 percent to N260.45 billion in 12 months 2023, compared to N132.79 billion the previous year. Due to a small selling price adjustment over the year, the gross profit margin increased by 400 basis points (bps) to 35.7 percent in the 12 months of 2023.

Selling and distribution expenses grew by 110 percent to N29.84 billion in the fiscal year 2023 due to an increase in the cost of diesel throughout the time. Administrative expenses fell by 8% to N17.21 billion in 12 months 2023.

Total operational expenses climbed by 43 percent to N47.06 billion in the fiscal year 2023, owing to an increase in selling and distribution costs along the supply chain to clients. EBITDA climbed by 74% to N215.6 billion in the fiscal year 2023, driven by increasing gross profit. In addition, the EBITDA margin increased by 20 basis points (bps) to 29.6 percent in 12 months 2023.

As a result, BUA Foods’ operating profit increased by 75% to N206.3 billion in the fiscal year 2023, owing to top-line growth driven by pricing adjustments and volume increases due to capacity development in the flour and pasta businesses. The operating profit margin increased by 20bps to 28.2 percent in 2023.

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