BUA Food Plc has come through rising inflation, currency volatility, and deteriorating infrastructure unscathed, making it the best consumer goods stocks.
The company’s earnings have been growing with alacrity even amid the bold reforms of president Bola Tinubu which has undermined peer rivals who are grasping for breath.
Investors have rewarded BUA Foods’ for its healthy balance-sheet, robust long and short term liquidity, and strong earnings per share (EPS) as the company’s shares have been rising since the start of the year.
For instance, BUA Foods’ has a year to date (YTD) return of 104.15 percent that has outperformed the NGXASI index.
That compares with Cadbury Nigeria Plc, (-8.42 percent); Guinness Nigeria, (-1.52 percent); International Brewery Plc, (-16.67 percent); Nascon Allied Industries, (-44.19 percent); Nigerian Brewery (-25 percent); Nestle Nigeria (-22.73 percent), and Dangote Sugar Refineries, (-43.74 percent).
Of course, investors’ apathy for shares of consumer goods firms was strengthened by the negative impact of the depreciation of the Naira that ballooned the dollar denominated debt in the books of entities who were reeling from rising inflation as the cost of imported raw materials skyrocketed.
Despite the macroeconomic headwinds, BUA Foods’ profit after tax (PAT) surged by 3,474 percent to N73.12 billion as at September 2024, as it continues to generate value for its shareholders, as it consolidates its position as the largest company profit, a rare feat for an entity that was listed on the NGX in 2022.
However, its competitors fell off the cliff as Cadbury, Nestle, Dangote Sugar Refinery, Guinness Nigeria, International Breweries, and Nigerian Breweries all posted huge net loss on the back of foreign exchange losses incurred in the aftermath of the currency devaluation.
Analysts say they expect BUA Foods’ Profitability to remain strong due to improved topline performance (sales volumes, prices increases, etc). shareholders’ funds to remain positive.
BUAFOODS is one of the top sugar producers in West Africa, boasting a refining capacity of 1.50mn metric tons. The company is engaged in the comprehensive production, milling, processing, and refining of sugar and its by-products, including bagasse, molasses, and mud cakes.
In the southeastern region, the company operates a flour milling facility with an annual capacity of 500.00 MT (metric tons). There are plans underway to expand this milling facility to reach an annual capacity of 1.30mn MT. Amongst others are its Pasta brand, Edibles Oils brand, and Rice brand.
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