Five Nigeria’s companies listed under the food products sub-sector of the Consumer Goods sector on the Nigerian Exchange (NGX) grew their net profit to N139.444 billion in the first nine months of the year ended September 30, 2022.
The five companies are; BUA Foods Plc, Dangote Sugar Plc, NASCON Allied Industries Plc, Nestle Plc and Cadbury Nigeria Plc.
According to the information contained in the nine months financial statements of these companies, the firms’ profit after tax rose by 24.83 per cent compared to third quarter (Q3) 2021.
The net profit growth recorded by the companies is remarkable, considering economic disruptions in the global economy occasioned by the ripple effect on energy, power, and food cost, amongst others, caused by the Russia-Ukraine face-off and the global inflationary pressure on household wallets.
The growth in revenue reported by these companies was driven by higher product prices and demand from consumers in the nine months of 2022.
Cadbury Nigeria posted net profits of N2.817 billion for the first nine months of the year 2022 from N1.513 billion in 2021, accounting for an increase of 486.1 per cent. Dangote Sugar Refinery grew profit after tax by 60.1 per cent to N24.832 billion from N15.513 billion in 2021, while Nestle Nigeria recorded a net profit of N40.152 billion, up by 19.56 per cent year-on-year, as against N33.584 billion.
Similarly, NASCON Allied Industry declared profit after tax growth of 19.3 per cent from N2.416 billion in 2021 to N2.882 billion, while BUA Foods posted a net profit of N68.761 billion higher than N58.683 billion in 2021.
Stock market analysts noted that the sector is not spared from the diverse challenges bedeviling the Nigerian economy, though, sector growth outperformed the broader economy in more than half a decade. This underscores the resilient nature of industry players.
Speaking on the company’s performance, Group managing director, Dangote Sugar Refinery Plc, Ravindra Singhvi attributed the positive results in the nine months to key trade interventions introduced during the year and positive market responses.
He said,“Our impressive performance in the period demonstrates our resilience in the face of prevalent challenges, which rightly reflected in strong topline growth shown in the financial results.”
Speaking on the Q3 results, the managing director of BUA Foods, Engr. Ayodele Abioye said, “We continue to navigate the high input cost environment to deliver double digit growth within the period. We grew revenue by 20.2 per cent, profit before tax by 16.9 per cent and earnings per share by 17.2 per cent.”
He stated that, “we are making progress with the recommencement of the rice business before year end 2022 to further diversify our revenue base. In addition, we are making progress with the backward integration plans for the sugar business and our capacity expansion plans for the flour, rice, and pasta divisions.”
On outlook, BUA Foods said, “Recent environmental disruptions such as flooding impacting on logistics efficiencies, energy cost, rising input cost, coupled with rising FX concerns and tightening stance of the Central Bank of Nigeria which further interest rate by another 100bps to 15.5 per cent are all core mitigating areas for us.
“We expect optimising our supply value chain as we strive to increase market share across market regions. Furthermore, our rice division recommencement is on course as we continue to nourish lives and increase market reach.
“Our retail strategy remains a priority for us in the near term, while we drive to sustain the upward momentum of our export market strategy. We remain committed to reducing Africa insecurity issues while nourishing lives.”