You see, in life, there is always a seed of equivalent benefit in every situation, but the task is on you to find it and milk it.
Food is to the belly and every business that has this behind its core deliveries, stand a better chance of making money in every economy.
The above statements are true of the situation in Nigeria when it comes to the business terrain.
So, while many Nigerian companies struggled through the first quarter of year 2023, as a result of the Naira crunch and Naira devaluation other companies are cashing out and declaring a very wide profit margin.
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BUA Foods Plc at their first quarter financial reports which were filed with the Nigerian Exchange Limited (NGX), reported a revenue increase of ₦144.3 billion.
BUA Foods is a leading Food and Fast-moving consumer goods (“FMCG”) business which processes, manufactures, and distributes food produce.
This revenue increase represents a rise by 26% to ₦144.3 billion, when compared with what it generated in the previous year ₦90,066,980.
Our Q1 Challenges
The manufacturing company highlighted the cash crunch and the 2023 general elections as challenges that they faced in their operations in the first quarter of year 2023.
Managing Director of Bua Foods, Ayodele Abioye, said the company “performed well across key financial metrics despite challenges from high food inflation, Naira crunch and the 2023 general elections”.
“We continue to leverage our unique strategic business model to minimise the impact.
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“Our commitment to being the most profitable business in our sector while creating long term values for our stakeholders as we expand our frontiers is unrivaled.”
Our Q1 Earnings
Despite the headwinds, in the first quarter, Bua Foods’ revenue rose by 26% to ₦144.3 billion.
Its profit after tax appreciated by 77.1% to ₦40.5 billion for the first quarter 2023.
All other performance indicators were sustained at double digits growth even as earnings per share increased by 77% relative to same quarter in 2022.
It also recorded an increase in the cost of sales (+41.9%) to ₦87.6 billion in Q1, 2023 (Q1 2022: ₦61.7 billion) driven by an increase in raw materials cost and energy cost.
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.
