BUA Foods Plc has delivered unprecedented financial performance for its 2024 fiscal year, crossing the trillion-naira revenue mark for the first time while recording significant profit growth across all product segments.
The company’s audited financial statements for the year ended December 31, 2024, show revenue of N1.527 trillion—more than double the N729.4 billion recorded in 2023, highlighting the growth potential of Nigeria’s food market.
This 109.5% year-on-year surge represents the highest annual revenue since BUA Foods was listed on the Nigerian Exchange (NGX) in 2021. The company’s pre-tax profit also skyrocketed by 162.9% to N284.32 billion, while profit after tax jumped 137.3% to N265.99 billion. However, BUA Foods faced headwinds, including a staggering N178 billion exchange loss due to the depreciation of the naira, which drove up interest obligation costs.
The company attributes its strong performance to sustained demand for its core products—sugar, flour, and pasta—along with strategic pricing, deeper market penetration, and increased production capacity. These factors enabled BUA Foods to boost its margins despite Nigeria’s challenging economic climate.
Flour Segment Leads Revenue Surge
While sugar remains BUA Foods’ highest-selling product, its flour segment emerged as a major revenue driver, growing by an impressive 171% year-on-year. The flour business contributed over N541 billion in 2024, accounting for 35.5% of total sales—up from 27.4% the previous year.
The surge in flour sales is linked to rising demand from Nigeria’s bakery industry and small-scale food enterprises that rely on locally produced flour. In anticipation of this growing demand, BUA Foods expanded its flour production lines in late 2023, a move that has now yielded substantial financial rewards.
Sugar sales, which have traditionally been the backbone of the company’s operations, contributed N734.5 billion, making up 48% of the total revenue. However, its share of total sales declined slightly, signaling a gradual diversification of BUA Foods’ revenue base.
The company’s pasta segment also continued its upward trajectory, bringing in N197 billion—12.9% of total revenue. The demand for BUA’s branded pasta products has remained strong, particularly among price-conscious consumers seeking alternatives to imported brands.
Local Market Dominance and Higher Dividends
BUA Foods’ dominance in Nigeria’s consumer goods market was further solidified in 2024, with domestic sales accounting for 95.5% of total revenue. This underscores the gap created by the country’s food supply gap marked by 40% inflation.
As a reward for its exceptional performance, the company’s Board of Directors has proposed a dividend of N13 per share—more than double the N5.50 paid in 2023. This 136.4% increase highlights BUA Foods’ commitment to delivering shareholder value and reflects confidence in its long-term profitability.
Impact of Rising Costs and Foreign Exchange Losses
Despite its impressive topline and bottom-line figures, BUA Foods was not immune to Nigeria’s macroeconomic challenges. The company reported a substantial increase in finance costs, largely driven by foreign exchange losses amounting to N173 billion. The naira devaluation pushed up the cost of imported raw materials, significantly impacting operations.
Raw materials alone accounted for over 91% of the company’s total cost of sales, but BUA Foods managed to improve its operating profit margin to 31%. This was achieved through tight cost controls and a reduction in impairment losses.
The company’s debt profile also showed positive signs, with total debt dropping to N391.85 billion, down from the previous year. Most of the debt remains short-term borrowings used for import financing. The decline in debt helped lower BUA Foods’ gearing ratio from a steep 210% in 2023 to a more manageable 81% in 2024, improving financial stability.
Expansion to Boost Future Growth
To sustain its growth momentum, BUA Foods is making significant investments in production capacity. In August 2024, the company signed a deal with Turkish flour milling equipment manufacturer IMAS to construct four new wheat flour mills. When completed, this expansion will increase BUA Foods’ total wheat flour milling capacity to 2.5 million metric tonnes per year, positioning the company as one of the largest flour millers in sub-Saharan Africa.
Further strengthening its product portfolio, BUA Foods announced in September that it would significantly expand its pasta production line. The company plans to install nine new long-cut pasta lines, which will nearly double the annual pasta production capacity from 500,000 tons to 900,000 tons. This expansion is expected to drive product innovations and boost volume growth, especially as demand for locally produced pasta rises.
To support this scale-up, BUA Foods has also partnered with Turkish firm Cukurova Silo to increase its grain storage capacity by 100,000 tons. This added capacity is expected to ensure consistent access to raw materials, minimize supply chain disruptions, and enhance operational efficiency—a critical factor given Nigeria’s volatile logistics environment.
With these ambitious expansion projects, BUA Foods is positioning itself for sustained growth amid Nigeria’s economic headwinds. Analysts believe that BUA Foods’ investments in flour and pasta will not only strengthen its market leadership but also reduce its dependence on sugar, which has historically been its primary revenue driver. Additionally, they note that the company’s strategic focus on local manufacturing and cost efficiency will help mitigate forex-related risks.
