Babban Gona Farmer Services, a Nigerian agribusinesses saw its revenue slide 21% in the 2024 financial year to N41.7 billion ($28.2 million), due to a general slowdown in the global maize market and the dwindling international prices of maize.
Revenues fell further by 5.7% (annualised) during the third quarter ending June 2025.
The lower sales were also exacerbated by reduced economic activities within the operating environment.
Despite these challenges, the EBITDA margin remained stable at 16% in 2024, mainly driven by substantial returns from smallholder partnerships and cost recoveries from grant inflows, which have trended at an average of N2 billion over the past five years.
The margin strengthened to 29.3% during Q3 2025 on the back of significantly higher grant income.
Babban Gona’s business model involves ongoing support for small-scale farmers across the agricultural cycle. This is anchored on the continual provision of agricultural inputs, financing, training, warehousing and distribution of farm outputs to smallholder farmers.
Also, access to consistent sizable grant receipts have supported good earnings over the years. The business model also evidences high exposure to commodity price fluctuations and concentration to a single product.
During the financial year to 30 September 2024, 42,563 smallholder farmers were onboarded (financial 2023: 39,690), with a corresponding 28,422 hectares (financial 2023: 26,460) of farmland cultivated, according to data from the firm.
Babban Gona’s competitive position is constrained by its exposure to commodity price volatility, exacerbated by its mono product base.
To diversify risk, the company commenced the production and sale of agrochemicals, but this is still predominantly used as a backward integration for input supply to farmers with no external sales.
Over the longer-term, Babban Gona is planning vertical integration into poultry feeds, as well as the implementation of its operating model for the aggregation of other farm outputs through partnerships with agro-processing entities.
Gross debt spiked to N87.3 billion in June 2025, from N49.7 billion in 2023 and N66.6 billion in 2024, arising from the adverse impact of the substantial currency devaluation on USD-denominated debt as well as additional loans obtained to support rising working capital requirements.
Management has indicated that the new operating model would foster improvement in working capital and subsequently reduce recourse to debt.
 Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
){kind=link}