Economy
BUA Foods Raises Dividend by 29% After Price Adjustment to Soak High Costs
By Dipo Olowookere
Shareholders of BUA Foods Plc will receive a higher cash reward for the 2022 financial year because the board of the organisation has proposed a higher dividend for the reporting year.
BUA Foods recently released its financial statements for 2022, and a dividend of N4.50 was declared, higher than the N3.50 paid to investors in the 2021 fiscal year by about 29 per cent.
This occurred after the company recorded a 38 per cent improvement in its profit before tax at N107.2 billion in the year under review compared with the N77.5 billion reported a year earlier, as the net profit grew by 31 per cent to N91.3 billion from the N69.8 billion posted in 2021, and the Earning Per Share (EPS) grew by 20 per cent to N5.07 from N4.24.
It was observed that despite the economic headwinds that characterised the year, especially due to the unending disruption of the business climate with high input costs and currency devaluation, BUA Foods reported an improvement in its gross earnings, majorly due to adjustments to the prices of the products.
Business Post reports that revenue grew by 26 per cent to N418.3 billion in FY 2022 from N333.2 billion 12 months earlier as a result of growth posted by its business lines, sugar, flour, and pasta.
The sugar segment of the business contributed 66 per cent to revenue in FY 2022, higher than the 64 per cent contribution in 2021, with revenue of N275.1 billion versus N209 billion in FY 2021.
This was driven by price adjustments and export sales within the period despite a decline in production due to energy disruptions.
As for the flour division, its contribution rose from 16 per cent to 20.6 per cent last year at N69.4 billion versus N85.9 billion, respectively. Price adjustments in the accounting year buoyed the growth despite a fall in the volume sold in the year.
However, the contribution of the pasta arm of BUA Foods to the revenue generated by the firm went down to 14 per cent from 20 per cent amid an 18 per cent drop in production volume to 111,578 tons from 136,859 tons as a result of energy challenges in the second quarter of the year.
According to the financial statements, increases in energy and raw materials costs pushed the cost of sales higher by 24 per cent in FY 2022 to N285.6 billion from N230.3 billion. The company said it was affected by the high input cost environment and further devaluation of the Naira against the US Dollar, which weighed heavily on prices for raw materials and aggravated the cost of production.
However, this did not suppress the gross profit, which rose by 29 per cent to N132.8 billion from N103 billion because the firm passed this cost to the consumers as it hiked the prices of its products.
Also, despite the 28 per cent jump in administrative expenses due to the increase in general expenses, and a 33 per cent leap in total operating expenses in the year, BUA Foods closed December 31, 2022, with an operating profit of N117.5 billion compared to N79.8 billion achieved in 2021.
Commenting on the performance of the organisation, the Managing Director of BUA Foods, Mr Ayodele Abioye, said, “BUA Foods Plc continued to maintain her leading position as the most profitable Foods and FMCG listed company in Nigeria with PBT of N107.2 billion, a growth of 38 per cent in the prior year.
“This is despite the unending disruption of the business climate with high input costs and currency devaluation resulting in increased operational costs.
“We remain resolute to navigate the numerous business headwinds to continue delivering double-digit growth with a sustained focus on our market expansion strategy across our business segments.
“Delivering long-term values to all our stakeholders as we continue to nourish lives remains cardinal.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south for the fourth consecutive session after it shed 1.18 per cent on Friday, March 13.
The unlisted securities market recorded a loss despite closing without a price decliner, and ending with two price gainers led by Geo Fluids Plc, which gained 1o Kobo to sell at N3.10 per share compared with the previous day’s N3.00 per share. Industrial and General Insurance (IGI) Plc appreciated during the session by 2 Kobo to trade at 54 Kobo per unit versus Thursday’s closing price of 52 Kobo per unit.
When the market closed for the day, the market capitalisation lost N29.83 billion to close at N2.489 trillion compared with the N2.519 trillion it finished a day earlier, and the NASD Unlisted Security Index (NSI) crashed by 49.84 points to 4,160.46 points from 4,210.31 points.
Market activity improved yesterday, as the volume of transactions rose 179.5 per cent to 10.4 million units from 3.7 million units, but the value of trades declined by 68.4 per cent to N29.9 million from N95.0 million, while the number of deals weakened by 11.5 per cent to 46 deals from 52 deals.
Central Securities Clearing Systems (CSCS) Plc remained the most active stock by value on a year-to-date basis with 38.4 million units worth N2.4 billion, Okitipupa Plc followed with 6.4 million units traded at N1.1 billion, and FrieslandCampina Wamco Nigeria Plc transacted 6.3 million units for N584.3 million.
Resourcery Plc ended the trading session as the most traded stock by volume on a year-to-date basis with 1.1 billion units valued at N415.6 million, trailed by Geo-Fluids Plc with 130.8 million units valued at N504.5 million, and CSCS Plc with 38.4 million units worth N2.4 billion.
By Adedapo Adesanya
The Naira continued to claw back some gains against the Dollar in the different segments of the foreign exchange (FX) market, as its value was strengthened on Friday.
In the black market, it gained N10 against the United States Dollar yesterday to close at N1,400/$1 compared with the preceding day’s rate of N1,410/$1, and at the GTBank forex counter, it chalked up N6 to close at N1,385/$1, in contrast to the N1,391/$1 it was traded a day earlier.
Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), it appreciated against the greenback during the session by N5.28 or 0.38 per cent to quote at N1,366.23/$1 versus Thursday’s closing price of N1,371.51/$1.
It also improved its value against the Pound Sterling in the official market on Friday by N21.81 to settle at N1,812.99/£1 compared with the previous day’s N1,834.80/£1, and gained N13.86 against the Euro to sell at N1,568.03/€1 versus N1,581.89/€1.
Pressure eased further on the FX market as the Central Bank of Nigeria (CBN) continued interventionist operations this week, selling Dollars to banks to boost liquidity after a $500 million boost last week.
This was complemented by inflows from foreign investors, exporters and non-bank corporates, among others, while Nigeria’s gross external reserves remained above $50 billion, the highest since 2009.
The Governor of the apex bank, Mr Yemi Cardoso, also eased fears of a Naira devaluation, saying the country’s financial system has been strengthened by reforms.
Regardless, external pressure looms as the US Dollar strengthened globally due to its war with Iran, now ongoing for three weeks.
Meanwhile, the cryptocurrency market was largely down as traders and investors continue to align with current realities.
The market is adapting to the conflict in real time. Early in the war, every headline produced an outsized reaction because nobody could price the tail risk. Now, traders have a framework where strikes happen, oil spikes and bitcoin dips only to recover again.
Cardano (ADA) depreciated by 3.8 per cent to $0.2623, Dogecoin (DOGE) lost 1.7 per cent to finish at $0.0948, Ripple (XRP) slumped 1.5 per cent to $1.39, Solana (SOL) dropped 1.4 per cent to sell for $87.33, Binance Coin (BNB) went down by 1.3 per cent to $653.58, Bitcoin (BTC) declined by 1.1 per cent to $70,670.63, and Ethereum (ETH) decreased by 0.9 per cent to $2,078.78.
However, TRON (TRX) appreciated by 1.7 per cent to $0.2941, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Adedapo Adesanya
The price of the major crude oil grade, Brent crude oil, closed above $100 on Friday for the second consecutive session, as the Iran war heads toward its third week, with oil tanker traffic through the Strait of Hormuz still effectively at a standstill.
It gained 2.67 per cent or $2.68 during the trading day to close at $103.14 per barrel, while the US West Texas Intermediate (WTI) crude oil grade appreciated by 3.11 per cent or $2.98 to settle at $98.71 per barrel.
Brent futures were up about 10 per cent for the week following the 27 per cent rise seen last week, which marked the biggest weekly gain in oil prices since the COVID-19 pandemic in 2020. WTI futures, which saw their best week since 1983 last week, ended the week more than 8 per cent higher.
US President Donald Trump said American forces launched a major bombing raid on Iran’s strategic Kharg Island, targeting military facilities on the key Persian Gulf outpost while warning Iran that its vital oil infrastructure could be destroyed if shipping in the Strait of Hormuz is disrupted.
The terminal accounts for roughly 90 per cent of Iranian crude shipments, loading millions of barrels per day onto tankers bound largely for Asian markets.
The US and Israel’s strikes in the conflict have largely targeted Iranian military and nuclear infrastructure. Oil facilities elsewhere in Iran have been hit, but Kharg’s massive storage tanks, jetties, and pipelines had remained untouched until the latest strike.
Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep fighting in a message delivered via state television.
There have been a number of attacks on foreign ships in or near the Strait, feeding into concerns that a prolonged war could translate to a global economic shock.
Prices are rising despite the US and its allies rolling out some measures to keep a lid on energy costs.
The International Energy Agency (IEA) has agreed to release 400 million stockpiled barrels, the largest such action in history.
The US has issued a 30-day waiver for India to purchase sanctioned oil from Russia. President Donald Trump is considering loosening rules under the Jones Act that require American ships to transport goods between domestic ports, including oil and gas, in an effort to lower costs.
Traders are continuing to monitor developments in the Middle East.
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