May 11, (THEWILL) – BUA Foods Plc’s earnings in Q1 2025 were the highest in the history of the 37-year-old company, with a net profit after tax of N125.28 billion, representing a 124 percent increase from N55.82 billion in the same period of 2024.
This reflects the growth trajectory in its pre-tax profit which went up by 118.69 percent amounting to N136.38 billion in the review period from the relatively meagre N62.36 billion in Q1 2024.
The foremost consumer goods firm’s revenue haul also rose significantly to N442.06 billion from N335.92 billion in the corresponding period constituting a 24 percent increase.
BUA Foods’ impressive earnings surge was driven by strong growth in flour, pasta, and rice sales, showcasing effective management and marketing strategies to cope with the mounting headwinds that underline the industry, especially in a high inflationary environment.
Specifically, flour revenue soared by 145 percent, while rice revenue increased at a remarkable 1617 percent. The company also saw a 12 percent increase in pasta revenue. While sugar sales saw a slight decrease, the overall revenue and profit growth were substantial.
The impact of the challenging macroeconomic environment on the manufacturing sector reflected in the Q1 2025 BUA Foods’ total operating expenses which climbed to ₦22.39 billion, while in Q1 2024, they were ₦14.37 billion. The 56 percent increase in operating expenses was primarily driven by higher selling and distribution expenses (up 13 percent to ₦11.08 billion) and administrative expenses (up 147 percent to ₦11.32 billion). The firm’s corporate existence was not alienated from the general inflationary environment sparked by the high cost of energy and the impact of the over 70 percent devaluation of the naira in June 2023.
Using key ratios for measuring the performance of a manufacturing company, BUA Foods stands on a good footing and shows significant improvement, according to data from its Q1 2024 performance.
The firm achieved a strong Return on Assets (RAO) with its total assets increasing to N1.14 trillion in Q1 2025 against N1.09 trillion in the preceding period, representing an increase of 4.3 percent — indicating a good asset utilisation and profitability during the period.
A significant increase of 62.77 percent was also achieved in Return on Equity (ROE) in the first three months of the year compared with 18.3 percent recorded in the equivalent period of 2024.
This ratio shows the efficiency in how the company is using its capital (debt and equity) to generate profits — providing a comprehensive view of the profitability that defined its performance during the period.
Further analysis of the firm’s performance showed that in Q1 2025, BUA Foods’ debt-to-equity ratio was 0.75x, compared to 4.08x in Q1 2024. This indicates a significant reduction in the company’s leverage. The company’s equity also increased, while liabilities decreased, further solidifying its financial health
Specifically, total liabilities were ₦588.3 billion, and equity was ₦554.3 billion, resulting in a debt-to-equity ratio of 0.75x in Q1 2025, against total liabilities of ₦666.4 billion, and equity ₦429.1 billion equity, resulting in a debt-to-equity ratio of 4.08x.
This reduction in the debt-to-equity ratio suggests that BUA Foods has been effectively managing its debt burden and strengthening its financial position. This reflected in the sharp drop in finance costs from N15.15 billion in Q1 2024 to N3.76 billion in the review period, constituting a 75 percent increase.
The negative record of N27.28 billion in foreign exchange loss in Q1 2024 reversed to N485.8 million contributing to the strong profit growth that also boosted the Earnings Per Share (EPS) to 6.96 from 3.10 in the corresponding period.
“It was quite an impressive performance when you consider the unfavourable macroeconomic environment in which the manufacturing sector is subjected to. It is a sign of series of strong management policies that must have helped the firm to achieve such a significant growth at a time like this,” said Dr Kene Odenigbo, an economist.
Commenting on the results, BUA Foods management applauded their Q1 2025 results highlighting strong growth and resilience amidst a challenging macroeconomic environment.
They emphasised a proactive supply chain approach and improved internal efficiencies as key drivers of performance. The company’s focus on market penetration and innovation to meet consumer needs was also mentioned, with confidence in their ability to continue strategic growth and value creation.
In Q1 2025, Goods sold (COGS) increased significantly to ₦984.9 billion, up from ₦468.9 billion in the same period of the previous year. This substantial increase was primarily driven by higher raw material costs, which accounted for over 91 per cent of the total COGS. Additionally, energy costs also contributed to the rise in COG
The FY 2024 performance significantly impacted on the Q1 2025 results. In 2024, BUA Foods’ revenue increased significantly, driven by factors including optimised pricing strategies and higher sales volumes.
While the company did not explicitly state how many times prices were increased, the data indicates a notable increase in revenue and profitability, suggesting that price adjustments were indeed implemented.
Analysts believe that BUA Foods’ FY 2024 audited reports indicate that the company adjusted prices to capitalise on revenue growth and higher sales volumes, particularly for flour and pasta products. Additionally, the company attributed a portion of its revenue growth to optimised pricing strategies.
BUA Foods is currently the second most valuable stock on the Nigerian Exchange (NGX) with a market capitalization of N7.52 trillion, which is about 11 percent of the entire Nigerian Exchange equity market.
BUA Foods closed its last trading day (Friday, May 9, 2025) at N418.00 per share on the NGX. The stock began the year with a share price of N415.00 and has since gained 0.72 percent on that price valuation.
It has traded a total volume of 2.76 million shares—in 4,377 deals—valued at N1.05 billion over the period, with an average of 43,760 traded shares per session. A volume high of 706,309 was achieved on February 19th, and a low of 1,793 on March 26th, for the same period.
BUA Foods has won multiple awards, including the “Company of the Year” award at the CNBC Africa Business Leaders Awards. They have also received recognition for their contributions to Corporate Social Responsibility (CSR). BUA Foods was also named the “Most Outstanding Manufacturing Conglomerate” and “Most Outstanding Manufacturing Conglomerate in CSR” at the 2021 Brandcom Awards.
The company emerged as the 2024 Company of the Year at the prestigious CNBC’s Africa All Africa Business Leaders Awards (AABLA) held in South Africa.
This historic win makes BUA Foods the first Nigerian organisation to win the Company of the Year award in the 12-year history of AABLA, Africa’s largest premier business award renowned for recognising outstanding achievers in Africa’s business landscape.
The award came hours before BUA Foods was named the “Most Valuable Indigenous Food Company” at the 2024 BrandCom Award in Lagos State. In late September 2024, Marketing Edge also awarded BUA Foods as the “Customer-centric FMCG Corporate Brand of the Year” while Media Consortium named IRS Premium Wheat Flour the “Premium Brand of the Year”.
Nigeria’s manufacturing sector has been lamenting over the harsh operating environment that impacts severely on the activities of the operating firms.
Last week, the Manufacturers Association of Nigeria (MAN) decried the worsening condition of manufacturing in Nigeria’s economy as the sector delivered a 1.38 per cent growth in 2024.
The Director-General of MAN, Mr Segun Ajayi-Kadir, speaking during a business luncheon organised on Thursday by the Apapa Branch of the MAN in Lagos, said in spite of the current macroeconomic realities plaguing global business operations, manufacturers must aim to exceed expectations.
“An internal survey by MAN reports that unsold inventory rose sharply from N1.1 trillion in 2023 to N2.1 trillion in 2024.
“You can imagine a subsector or a sector, depending on how you look at it, having two trillion worth of unsold inventory.
“Additionally, challenges related to transport and logistics, infrastructure, particularly around major ports and industrial corridors, make the operating environment unconducive for manufacturing.
“The impact of these challenges is evident in the sector’s capacity utilisation and its contribution to GDP , which have hovered around 5.5 per cent and 10 per cent respectively, over the past 12 months,” he said.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
