Nigerian billionaire Abdul Samad Rabiu's BUA Foods reports 38-percent profit growth to $82 million

Oluwatosin Racheal Alabi -

Key Points:

  • BUA Foods’ profit increased by 38 percent to $82 million, driven by strong growth in sugar, flour, and pasta sales.
  • Revenue surged by 110 percent year on year, reaching ₦672.3 billion ($420.19 million), with contributions from all key product lines.
  • Despite rising costs, BUA Foods maintained profitability through strategic cost management and a 1,268-percent increase in other income.

BUA Foods Plc, owned by Nigerian billionaire Abdul Samad Rabiu, has reported a financial performance improvement in the first half of 2024.

The company, one of Nigeria’s leading food producers, announced a 38-percent increase in profit, reaching ₦131 billion ($82 million).

BUA Foods revenue surges by 110 percent in first half of 2024

In its unaudited financial statement published on the Nigerian Exchange, BUA Foods Plc revealed a sparkling growth in its topline, with total revenue increasing by an astounding 110 percent year on year.

The revenue soared to ₦672.3 billion ($420.19 million) from ₦320.9 billion ($200.56 million) in the first half of 2023. This surge was primarily driven by growth across its key product lines.

Sugar sales led the charge, increasing by 88 percent to ₦369.7 billion ($231.06 million) from ₦196.5 billion ($122.81 million) in the same period last year. Flour sales saw an even more impressive rise, skyrocketing by 164 percent to ₦227.9 billion ($142.44 million) from ₦86.05 billion ($53.78 million).

Additionally, pasta sales grew by 95% to ₦74.03 billion ($46.27 million) from ₦37.9 billion ($23.69 million), further bolstering the company’s revenue.

Despite this revenue growth, BUA Foods faced increased costs of sales, which climbed by more than 141 percent year on year to ₦453.94 billion ($283.71 million) from ₦188.907 billion ($118.07 million). This surge in costs reduced the company’s gross margin to 32.5 percent from 41.14 percent in the comparable period last year.

Cost management and other income boosts profit

BUA Foods’ administrative expenses, coupled with selling and distribution overheads, raised its total operating expenses during the period. Nevertheless, the company managed to bolster its profitability through significant growth in other income and strategic cost management.

Other income for BUA Foods grew by an impressive 1268 percent year on year, settling at ₦12.658 billion ($7.91 million). This increase provided an added income advantage, helping to offset some of the rising costs.

However, net finance costs rose sharply in the first half of 2024, up by 65 percent to ₦10.406 billion ($6.50 million) from ₦6.3 billion ($3.94 million) in the previous year.

This increase was propelled by a spike in finance costs, which surged by 211 percent year on year from ₦6.3 billion ($3.94 million) to ₦19.6 billion ($12.25 million), excluding losses sustained from exchange rate fluctuations.

The company also faced a loss of about ₦55 billion ($34.38 million) due to naira devaluation.

Profit before tax grew by 25.42 percent to ₦137.188 billion ($85.74 million) from ₦109.381 billion ($68.36 million). Reduced tax payments further lifted the company’s bottom line, with profit after tax growing by 38 percent to ₦130.9 billion ($81.81 million) from ₦95.1 billion ($59.44 million).

Despite these gains, the net profit margin declined to 19.5 percent from 29.7 percent in the previous 12 months.

With strong revenue growth across multiple product lines and effective cost management strategies, BUA Foods continues to cement its position as a leading player in Nigeria’s food industry.