BUA Foods experienced a remarkable financial performance for the year 2024, with its after-tax profit more than doubling from the previous year. The company’s after-tax profit (PAT) reached a record N274.9 billion, marking an impressive 145 percent increase compared to the N112.1 billion it recorded in 2023.
The group’s revenue in 2024 also saw significant growth, surpassing N1.53 trillion, a substantial rise from the N729 billion posted in 2023. However, the sharp rise in revenue came with an increase in operational costs. The cost of sales jumped by 110 percent, reaching N985 billion, compared to N469 billion in the previous year.
Despite the higher costs, BUA Foods still managed to maintain a strong performance overall, though there was a slight dip in its gross margin. The company’s gross margin decreased to 35 percent from 36 percent in 2023, reflecting the increased costs associated with the higher sales volume.
Investors are also likely to benefit from the company’s performance, as earnings per share (EPS) more than doubled, rising to N15.27 from N6.23 in 2023.
The group’s operating profit grew to N489.2 billion, a 137 percent increase from the N206.3 billion recorded in 2023. This growth pushed the company’s operating margin up to 32 percent, from 28 percent in the previous year.
BUA Foods also took steps to optimize its operations in 2024. The company generated more than N1 billion in revenue by selling scrap equipment and rice bran. Additionally, BUA ventured into new areas outside its core business, bringing in N6.5 billion under “Sundry Income.”
One of the standout performers within BUA Foods was its bakery flour business, which saw its revenue skyrocket by 172 percent to N544.9 billion, up from N200.2 billion in 2023. Although the sugar business remains the biggest contributor to overall revenue, the growth in bakery flour shows the company’s diversification efforts paying off.
The company also made significant strides in expanding its product offerings, with revenue from its maize business reaching N11.4 billion and N1.9 billion from its semolina operations.
However, rising costs were a challenge for BUA Foods. The cost of raw materials surged to N914.8 billion, more than doubling from the N447.6 billion reported in 2023. Additionally, energy expenses saw a sharp increase, tripling to N51.6 billion from N14.4 billion in the previous year.
As of now, BUA Foods is trading at a share price of N415. With a price-to-earnings ratio of 27.2x, the company is considered to be relatively inexpensive compared to other trillion-Naira listed stocks.
