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The revenue of BUA Foods Plc, the largest consumer goods firm, by market capitalisation and profit, will cross the N1 trillion mark in 2024, according to analysts at Meristem Securities Limited who anticipate a 52.50 percent growth at the bottom-line (sales).
“This projection is based on inflation-reflective price adjustments, ongoing expansions in their rice business, and the introduction of vegetable oil production in 2024,” said analysts at Meristem Securities.
The company that leapfrogged firms that listed before it t0 become the most successful firm in the sector has been growing earnings at double digit since it listed some two years ago.
BUA Foods stunned the market as it was impervious to the foreign exchange losses which undermined peer rivals such as Nestle Nigeria, Dangote Sugar, and Cadbury who posted net losses. And that helped solidify its position at the top of the pyramid.
It is important to note the company had put in some measures in place to hedge against foreign exchange risk as it sources its main raw materials and food commodities from agricultural producers both domestically and outside the country.
BUA Foods maintains an extensive supply chain and is actively involved in backward integration initiatives, particularly focusing on sugar and promotion of local paddy rice sourcing.
To further develop the agricultural value chain and enhance local sourcing, as part of its initiative, the company plans to expand its farm-to-table initiatives to involve collaboration with external growers to source wheat and edible oils.
BUA Foods reported consistent revenue growth over the past five years, maintaining a robust CAGR of 42.41 percent from full-year 2018 to full-year 2022, according to data from Meristem Securities.
For the first nine months September 2023, BUA Foods, revenue spiked by 80.95 percent to N524.43 billion from N289.82 billion as at September 2022.
Gross profit surged by 95.14 percent to N183.78 billion in September 2023 from N94.17 billion as at September 2022.
Despite rising inflation and foreign exchange scarcity squeezing manufacturers profit margins, BUA Foods is able to record profit margin expansion.
Gross profit margin increased to 35.04 percent in the period under review from 32.49 percent as at September 2022.
Operating profit margin rose to 30 percent in September 2023 from 27.83 percent as at September 2022.
The company’s shares have gained 40.54 percent, valuing it at N4.89 trillion.
“Feeding from a solid revenue performance and the company’s cost optimization strategies, we expect an expansion in BUAFOODS’s bottom-line to N174.75 billion, representing a growth of 53.80 percent year-on-year (YoY),” summed analysts at Meristem Securities.
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