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 Modupe Gbadeyanka
The federal government has been asked by the Nigerian Bar Association (NBA) to suspend the implementation of the controversial tax laws.
In a reaction to the tax reform acts, the president of the group, Mr Afam Osigwe (SAN), the suspension of the laws would allow for a proper investigation into allegations of alterations in the gazetted and harmonised copies.
A member of the House of Representatives, Mr Abdussamad Dasuki, alleged that some parts of the laws passed by the parliament were different from the gazetted copy.
To address the issues raised, the NBA said it is “imperative that a comprehensive, open, and transparent investigation be conducted to clarify the circumstances surrounding the enactment of the laws and to restore public confidence in the legislative process.”
“Until these issues are fully examined and resolved, all plans for the implementation of the Tax Reform Acts should be immediately suspended,” the association declared.
It noted that the controversies “raise grave concerns about the integrity, transparency, and credibility of Nigeria’s legislative process.”
“These developments strike at the very heart of constitutional governance and call into question the procedural sanctity that must attend lawmaking in a democratic society,” it noted.
“Legal and policy uncertainty of this magnitude has far-reaching consequences. It unsettles the business environment, erodes investor confidence, and creates unpredictability for individuals, businesses, and institutions required to comply with the law. Such uncertainty is inimical to economic stability and should have no place in a system governed by the rule of law.
“Nigeria’s constitutional democracy demands that laws, especially those with profound economic and social implications, emerge from processes that are transparent, accountable, and beyond reproach. Anything short of this undermines public trust and weakens the foundation upon which lawful governance rests.
“We therefore call on all relevant authorities to act swiftly and responsibly in addressing this controversy, in the overriding interest of constitutional order, economic stability, and the preservation of the rule of law,” the organisation stated.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
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