BUA FOODS PLC BUA Foods Plc - 9M 2022 Unaudited Results
NGX Ticker: BUAFOODS; Bloomberg Ticker: BUAFOODS NL; Reuters: BUAFOODS.LG
EARNING PRESS RELEASE
Regulated Information
Revenue growth of 20.2% to ₦289.8 billion for 9M 2022, Profit After Tax grows by 17.2%
Lagos, 3rd November 2022 - BUA Foods Plc ("BUA Foods", or "the Company") announced its results for the period ended 30 September 2022.
Key Financial Highlights
Group | Company | ||||||||||||||
In thousands of naira | 9M 2022 | 9M 2021 | 9M 2022 | 9M 2021 | |||||||||||
Revenue | 289,819,825 | 241,078,629 | 20.2% | 221,650,393 | 166,001,829 | 33.5% | |||||||||
Cost of Sales | 195,641,326 | 158,825,185 | 23.2% | 159,203,255 | 109,825,155 | 45.0% | |||||||||
Gross Profit | 94,178,499 | 82,253,444 | 14.5% | 62,447,138 | 56,176,674 | 11.2% | |||||||||
Gross Margin (%) | 32.5 | 34.1 | -4.7% | 28.2 | 33.8 | -16.6% | |||||||||
Selling and distribution | 10,353,073 | 7,824,500 | 32.3% | 9,123,930 | 5,498,228 | 65.9% | |||||||||
expenses | |||||||||||||||
Administrative expenses | 4,488,851 | 5,497,224 | -18.3% | 3,290,455 | 4,486,216 | -26.7% | |||||||||
Total operating expenses | 14,841,924 | 13,321,724 | 11.4% | 12,414,385 | 9,984,444 | 24.3% | |||||||||
Cost to Income (%) | 72.63 | 71.41 | 1.7% | 77.41 | 72.11 | 7.3% | |||||||||
Operating Profit | 79,336,575 | 68,931,720 | 15.1% | 50,032,753 | 46,192,230 | 8.3% | |||||||||
Operating profit margin | 27% | 29% | -6.9% | 22.6 | 27.9 | -19% | |||||||||
(%) | |||||||||||||||
Other income | 1,327,858 | 1,162,522 | 14.2% | 1,325,604 | 1,161,498 | 14.1% | |||||||||
Finance charges | 6,396,131 | 6,513,947 | -1.8% | 6,152,429 | 5,833,390 | 5.5% | |||||||||
Profit before income tax | 74,268,302 | 63,580,295 | 16.8% | 45,205,928 | 41,520,338 | 8.9% | |||||||||
PBT Margin (%) | 25.6% | 26.4% | -2.8% | 20.4% | 25.0% | -18.5% | |||||||||
Income Taxes | 5,507,047 | 4,895,260 | 12.5% | 5,507,047 | 4,895,260 | 12.5% | |||||||||
Effective tax rate (%) | 7.4% | 7.7% | -3.7% | 12.2% | 11.8% | 3.3% | |||||||||
Profit for the period | 68,761,255 | 58,685,036 | 17.2% | 39,698,880 | 36,625,077 | 8.4% | |||||||||
Earnings Per share (Kobo) | 3.82 | 3.26 | 17.2% | 2.21 | 2.01 | 10.0% | |||||||||
Return on Equity (%) | 140.00 | 120.00 | 16.7 | 125.00 | 83.00 | 50.6 | |||||||||
Return on Assets (%) | 46.00 | 41.00 | 12.2 | 38.00 | 28.00 | 35.8 | |||||||||
Total assets | 630,397,972 | 593,469,515 | 6.2% | 591,022,396 | 582,673,898 | 1.4% | |||||||||
Total equity | 206,479,925 | 200,718,673 | 2.9% | 177,291,684 | 200,592,804 | -11.6% | |||||||||
Total liabilities | 423,918,046 | 392,750,842 | 7.9% | 413,730,711 | 382,081,094 | 8.3% | |||||||||
Commenting on the results, Engr. Ayodele Abioye, the Managing Director said, "We continue to navigate the high input cost environment to deliver double digit growth within the period. We grew revenue by 20.2%, profit before tax by 16.9% and earnings per share by 17.2%.
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BUA Foods Plc - 9M 2022 Unaudited Results
NGX Ticker: BUAFOODS; Bloomberg Ticker: BUAFOODS NL; Reuters: BUAFOODS.LG
We are making progress with the recommencement of the rice business before year end 2022 to further diversify our revenue base. In addition, we are making progress with the backward integration plans for the sugar business and our capacity expansion plans for the flour, rice, and pasta divisions."
Group performance and financial review
Revenue grew by 20.2% y-o-y to ₦289.8 billion in 9M 2022 (9M 2021: ₦241.1 billion). This was due to a
y-o-y increase of 17.0% in Sugar to ₦180.9 billion (9M 2021: ₦154.7 billion), 37% in Flour to ₦66.2 billion
(9M 2021: ₦48.1 billion), and 12.0% in Pasta to ₦42.7 billion (9M 2021: ₦38.2 billion).
Growth in cost of sales (+23.2%) to ₦195.6 billion in 9M 2022 (9M 2021: ₦158.8 billion) was driven by an increase in raw materials cost (+26.7% y-o-y; 88.7% of cost of sales). Energy cost only decline marginally (6.2% y-o-y; 4.3% of cost of sales). 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 14.5% to ₦94.2 billion in 9M 2022 (9M 2021: ₦82.2 billion) although gross profit
margin deteriorated by 160bps to 32.5% in 9M 2022 (9M 2021: 34.1%) due to the increase in input costs.
Selling and distribution expenses increase by 32.3% to ₦10.4 billion in 9M 2022 (9M 2021: ₦7.8 billion) due to huge increase in cost of diesel within the period.
Administrative expenses also declined by 18.3% to ₦4.4 billion in 9M 2022 (9M 2021: ₦5.5 billion) driven
majorly by the decrease in general expenses (-61.4%) to ₦885 million in 9M 2022 (9M 2021: ₦2.2 billion)
and Maintenance & Repairs (-31.4%) to ₦723.7 million in 9M 2022 (9M 2021: ₦1.1 billion).
Total operating expenses increased by 11.4% to ₦14.8 billion in 9M 2022 (9M 2021: ₦13.3 billion) increase in selling and distribution cost along the supply chain to customers
EBITDA increased by 2% to ₦86.4 billion in 9M 2022 (9M 2021: ₦84.6 billion), driven by growth in gross
profit. EBITDA margin deteriorated by 520bps to 29.8% in 9M 2022 (9M 2021: 35%).
Operating profit grew by 15.1% to ₦79.3 billion in 9M 2022 (9M 2021: ₦68.9 billion) benefitting from top line growth coupled with lower administrative expenses. Operating profit margin decline marginally by 400bps to 27% in 9M 2022 (9M 2021: 28.0%).
Finance charges drop marginally by 1.8% to ₦6.4 billion in 9M 2022 (9M 2021: ₦6.5 billion) due to efficient funding mix along business transaction.
Profit before tax increased by 16.8% to ₦74.2 billion in 9M 2022 (9M 2021: ₦63.5 billion) although profit
before tax margin decline by 80bps to 25.6% in 9M 2022 (9M 2021: 26.4%) due to increase in sales and distribution expenses.
Profit after tax increased by 17.2% to ₦68.7 billion in 9M 2022 (9M 2021: ₦58.6 billion) benefitting from
a lower effective tax rate of 7.4% in 9M 2022 (9M 2021: 7.73%), while the Earning per Share (EPS) grew by 17.2% to N3.83 in 9M 2022 from N3.26 in the corresponding period.
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BUA Foods Plc - 9M 2022 Unaudited Results
NGX Ticker: BUAFOODS; Bloomberg Ticker: BUAFOODS NL; Reuters: BUAFOODS.LG
Operating segment performance
Sugar division
The Sugar division contributed 62.4% to revenue in 9M 2022 (9M 2021: 64.2%). Sugar Revenue grew by
17.0% to ₦180.9 billion in 9M 2022 (9M 2021: ₦154.7 billion). This was driven by price adjustments and export sales within the period. Volume sold declined by 8.2% to 418,329 tons within the period (9M 2021: 453,773 tons). The decline in production is attributable to energy disruptions within the period. Non- fortified sugar and molasses delivered good growth from elevated demand in the period. Non-fortified sugar grew by 58.1% (53.4% of sugar sales) with revenue of ₦96.6 billion in 9M 2022 (9M 2021: ₦61.1 billion). Molasses contributed 0.4% to revenue in 9M 2022 (+99% y-o-y). Revenue from fortified (46.3% of sugar sales) declined by 10.3% to ₦83.7 billion in 9M 2022 (9M 2021: ₦93.3 billion).
EBITDA was up by 3.6% to ₦55.1 billion in 9M 2022 (9M 2021: ₦53.2 billion). EBITDA margin was marginally the same at 30.5% with the comparable period.
Operating profit increased by 18% to ₦51.9billion in 9M 2022 (9M 2021: ₦44billion) due to increase in
selling price. Operating profit margin deep slightly by 30bps to 28.7% in 9M 2022 (9M 2021: 29.0%).
Profit after tax grew by 38.1% to ₦45.9 billion in 9M 2022 (9M 2021: ₦33.3 billion) while profit after tax
margin appreciated by 340bps to 25.4% in 9M 2022 (9M 2021: 22.0%).
Net Profit before Tax Margins grew to 26% from 25% achieved in the same period in 2021.
Flour division
The Flour division contributed 22.8% to revenue in 9M 2022 (9M 2021: 19.9%). Revenue increased by
38.0% to ₦66.2 billion in 9M 2022 (9M 2021: ₦48.1 billion). This was driven by adjustments in pricing as
volume sold declined by 8% to 138,894 tons within the period (9M 2021: 151,557 tons). The decline in production is attributable to energy challenges in Q2 2022. Revenue from bakery flour (93.8% of flour sales) increased by 40.6% to ₦62.1 billion in 9M 2022 (9M 2021: ₦44.1 billion) while wheat bran (6.2% of flour sales) also grew marginally by 3.3% to ₦4.1 billion in 9M 2022 (9M 2021: ₦3.9 billion). The contribution margins increased to 27% from 21%for the same period last year due to higher selling price.
EBITDA was up by 52% to ₦15.5 billion in 9M 2022 (9M 2021: ₦10.2billion). EBITDA margin grew by
240bps to 23.6% in 9M 2022 (9M 2021: 21.2%).
Operating profit increased significantly by 87.0% to ₦13.7 billion in 9M 2022 (9M 2021: ₦7.3 billion) due to product price adjustment. Operating profit margin improved by 560bps to 20.9% in 9M 2022 (9M 2021: 15.3%).
Profit after tax appreciated by 30.9% to ₦13.5billion in 9M 2022 (9M 2021: ₦10.3billion) while profit after
tax margin decline slightly to 20.5% in 9M 2022 (9M 2021: 21.5%).
Net Profit before Tax Margins increase to 21% from 15% for the same period last year.
Pasta division
The Pasta division contributed 14.7% to revenue in 9M 2022 (9M 2021: 15.8%). Revenue increased by 12% to ₦42.7 billion in 9M 2022 (9M 20201 ₦38.1 billion). This was driven by adjustments in pricing as volume sold declined by 13.0% to 87,648 tons (9M 2021: 100,320 tons) within the period. The decline in production is attributable to energy challenges in Q2 2022.
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BUA Foods Plc - 9M 2022 Unaudited Results
NGX Ticker: BUAFOODS; Bloomberg Ticker: BUAFOODS NL; Reuters: BUAFOODS.LG
EBITDA drop by 26.3% to ₦15.7billion in 9M 2022 (9M 2021: ₦21.3 billion). EBITDA margin declined to
36.8% in 9M 2022 (9M 2021: 55.9%).
Operating profit declined by 17.7% to ₦14.4billion in 9M 2022 (9M 2021: ₦17.5billion) while operating
profit margin declined by 1,230bps to 33.9% in 9M 2022 (9M 2021: 46.2%).
Profit after tax declined by 33% to ₦10.1billion in 9M 2022 (9M 2021: ₦15.0billion) while profit after tax
margin declined by 1,590bps to 23.7% in 9M 2022 (9M 2021: 39.6%).
Net Profit before Tax Margins of 34% was recorded in comparison to 46% in the same period in 2021.
Review of statement of financial position
Total assets increased by 6.3% to ₦630.4 billion as of 9M 2022 (FY 2021: ₦593.5 billion) driven largely by growth in trade and other receivables (+121%; 18.3% of total assets), due from related companies (-28.7%; 18.5% of total assets), and property, plant and equipment grew marginally because of the additions to machineries to increase capacity. The increase in cash and short-term deposits was due to advance payment for goods.
Net cash from operating activities grew by 437.8% to ₦103.7 billion as at 9M 2022 (9M 2021: ₦23.7 billion) due to changes in dues from related companies, changes in contract liabilities as well as inventory.
Net cash from financing activities was ₦93.7 billion in 9M 2022 (9M 2021: ₦27 billion) due to additional proceeds from borrowings of ₦35.2 billion, repayment of borrowings of ₦67.5 billion in 9M 2022 (9M 2021: ₦31.9 billion) and finance cost paid.
Total liabilities grew by 8% to ₦423.9 billion as of 9M 2022 (FY 2021: ₦392.8 billion). This was driven
mainly by a increase in contract liabilities (+46.5%: 14.2% of total liabilities). Trade and other payables
which account for 14.7% of total liabilities increased by 61.8% to ₦62 billion as of 9M 2022 (FY 2021: ₦38.3 billion) and bank overdraft increased by 284.1% (2.6% of total liabilities).
Total equity increased by 2.9% to ₦206.5 billion as of 9M 2022 (FY 2021: ₦200.7 billion) mainly due to a
marginal growth of 3.0% in retained earnings to ₦198.4 billion as of 9M 2022 (FY 2021: ₦192.7 billion).
Outlook
Recent environmental disruptions such as flooding impacting on logistics efficiencies, energy cost, rising input cost, coupled with rising FX concerns and tightening stance of the Central Bank of Nigeria which further interest rate by another 100bps to 15.5% are all core mitigating areas for us.
We expect optimizing our supply value chain as we strive to increase market share across market regions. Furthermore, our rice division recommencement is on course as we continue to nourish lives and increase market reach. Our retail strategy remains a priority for us in the near term, while we drive to sustain the upward momentum of our export market strategy. We remain committed to reducing Africa insecurity issues while nourishing lives.
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BUA Foods Plc - 9M 2022 Unaudited Results
NGX Ticker: BUAFOODS; Bloomberg Ticker: BUAFOODS NL; Reuters: BUAFOODS.LG
For further information, please contact:
Abdulrasheed Olayiwola
Chief Financial Officer
- Abdulrasheed.Olayiwola@buafoodsplc.com
M: 234 803 334 3914
Gabriel Fapojuwo
Investor Relations Manager
- Gabriel.Fapojuwo@buafoodsplc.com
M: +234 816 672 3182
BUA Foods Investor Relations
IR@buafoodsplc.com
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BUA Foods plc published this content on 04 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2022 15:01:03 UTC.
