Last Update31 Jul 25
WaneInvestmentHouse has decreased revenue growth from 25.9% to 17.6% and decreased shares outstanding growth rate from 0.1% to 0.0%.
BUA Foods Plc H1/Q2- Strong Operating Momentum Amid Macroeconomic Volatility
BUA Foods Plc delivered an impressive performance in H1 2025, showcasing significant growth in revenue and profit across both group and company levels, despite the macroeconomic headwinds and exchange rate volatility. The company's ability to maintain high margins and generate robust profits reinforces its position as a resilient player in Nigeria’s consumer goods and food manufacturing sector.
Key Highlights (H1 2025 vs H1 2024):
1. Revenue Growth and Profitability
- Turnover rose by 34% YoY to ₦912.5 billion (Group), reflecting increased product demand, price adjustments, and market expansion.
- Gross profit improved by 49% YoY to ₦339.3 billion, showing efficient cost management despite inflationary pressures.
- Operating profit surged 56% YoY to ₦284.8 billion, showing operating leverage and cost control.
2. Profitability Metrics
- Profit before tax (PBT) rose to ₦276.1 billion, up 57% YoY, confirming strong bottom-line resilience.
- Net profit after tax came in at ₦260.1 billion, growing 63% YoY, with EPS up from ₦8.85 to ₦14.45, indicating strong value creation for shareholders.
3. Margin Stability
- The company maintained healthy gross and operating profit margins despite higher administrative and selling expenses:
- Admin expenses: +24% YoY
- Selling & distribution expenses: +22% YoY
- This underscores BUA Foods’ ability to pass on costs or maintain pricing power.
4. Finance Cost and FX Impact
- Net finance cost worsened from a gain of ₦8.5 billion in H1 2024 to a net cost of ₦9.1 billion in H1 2025.
- A foreign exchange loss of ₦54.6 billion was recorded, likely due to naira devaluation and FX translation losses.
Strengths:
✅ Exceptional top-line and bottom-line growth, driven by volume, pricing, and improved operational efficiency. ✅ Strong profit margins and high EPS, indicating value creation. ✅ Robust cost discipline in managing direct costs. ✅ Scale advantage and market leadership in Nigeria’s food and FMCG sector.
Weaknesses:
⚠️ Significant FX losses (₦54.6 billion) due to currency devaluation, affecting net finance result. ⚠️ Rising administrative and selling costs, which, if unchecked, may dilute future margins. ⚠️ Volatility in finance income/costs, showing sensitivity to interest rates and foreign exchange risks.
BUA Foods is fundamentally strong, with consistent revenue growth, healthy margins, and robust earnings performance. Despite FX volatility and cost pressures, the company’s operational resilience and market dominance make it a compelling investment in Nigeria’s consumer goods space.
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Disclaimer
The user WaneInvestmentHouse holds no position in NGSE:BUAFOODS. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.