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 National Pension Commission (PenCom) has defended its decision to allow Pension Fund Administrators (PFAs) to invest in the parent companies of their custodians, insisting that adequate safeguards are in place to protect contributors’ funds.
The director-general of the pension regulator, Ms Omolola Oloworaran, speaking on Tuesday during the Meet the Press Briefing at the Presidential Villa, Abuja, said the commission’s decision to relax the investment restriction followed a comprehensive risk assessment that found minimal conflict of interest.
She explained that under PenCom’s investment regulations, PFAs are only permitted to invest pension assets in carefully selected instruments that meet stringent criteria, including profitability, strong credit ratings and proven track records.
According to her, the commission regularly reviews its investment regulations, conducts routine examinations and spot checks on PFAs to ensure strict compliance with established risk management guidelines.
“PFAs cannot just go into the stock market and buy any kind of stock. There are strict guidelines. Companies must demonstrate profitability, have a proven track record and satisfy other criteria before pension funds can invest,” she said.
Ms Oloworaran noted that each PFA also operates under the oversight of a board, an investment committee and a risk management committee, providing additional layers of governance to safeguard contributors’ funds.
She said PenCom recently issued a circular allowing PFAs to invest in the parent companies of their custodians after determining that the potential conflict of interest was negligible.
The PenCom boss explained that the parent companies involved are largely Tier-1 banks, including First Bank, United Bank for Africa (UBA) and Zenith Bank, which she described as A-rated institutions with strong financial foundations.
She said the policy was intended to widen investment opportunities for pension funds without compromising safety.
Using Stanbic IBTC as an example, Ms Oloworaran explained that if its custodian is Zenith Bank, the previous restriction prevented the pension administrator from investing in Zenith Bank shares despite the bank’s strong performance.
“We reviewed the risks and any potential conflict of interest and found the risks to be very low. That is why we opened that investment window,” she said.
By Aduragbemi Omiyale
Analysts at Meristem Research have predicted that the inflation rate for June 2026 in Nigeria should marginally rise to 15.95 per cent on a year-on-year basis from the 15.93 per cent reported in May 2026.
The National Bureau of Statistics (NBS) is expected to release inflation numbers for last month later today, Wednesday, July 15, 2026.
In its report sighted by Business Post, Meristem Research said it expects inflationary pressures to re-emerge across key economies in the near term, as the re-escalation of the US-Iran conflict has reignited upward pressure on global oil prices.
It disclosed that this marks a sharp reversal from most of June, when the ceasefire between the two countries helped drive oil prices lower, raising expectations of some relief on the inflation front.
With conflicts now flaring up again, oil prices are likely to increase again, and the anticipated easing in energy-driven inflation may not materialise as broadly as earlier envisaged.
“Nonetheless, some relief is likely from the food segment, where robust supply conditions across major producing regions and softening demand should continue to ease food price pressures,” it stated.
The team also explained that it projected a 15.95 per cent inflation rate because of the lingering effects of persistent food price pressures.
“However, we expect core inflation to moderate as the sharp reversal in energy prices begins to filter through to transportation, distribution, and other energy-related costs, easing underlying price pressures.
“On a month-on-month basis, the combined effect of lower petrol prices, a relatively stable Naira, and the gradual pass-through of reduced energy costs across the supply chain should exert further downward pressure on inflation.
“Based on our assessment, food inflation is expected to remain the key swing factor, as seasonal pre-harvest supply constraints are likely to offset some of the gains from lower logistics costs,” it said.
By Adedapo Adesanya
The duo of Central Securities Clearing System (CSCS) Plc and Afriland Properties Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.61 per cent on Tuesday, July 14.
CSCS Plc saw its stock value drop N9.08 to close at N82.40 per share compared with the preceding session’s N91.48 per share, and Afriland Properties Plc slid by 17 Kobo to sell at N15.00 per unit versus N15.70 per unit.
The losses recorded by the two securities pulled back the market capitalisation by N41.64 billion to N2.546 trillion from N2.587 trillion, and cracked the NASD Security Index (NSI) by 69.36 points to 4,242.31 points from 4,311.67 points.
It was observed that the exchange witnessed two price advancers during the session, led by FrieslandCampina Wamco Nigeria Plc, which gained N1.37 to end at N151.37 per share compared with the previous day’s N150.00 per share, and Food Concepts Plc chalked up 5 Kobo to settle at N2.50 per unit versus N2.45 per unit.
The volume of securities traded by market participants surged by 50.7 per cent to 13.7 million units from the previous 9.1 million units, while the value of securities went down by 79.7 per cent to N65.2 million from N320.4 million, and the number of deals crashed by 3.6 per cent to 27 deals from the previous session’s 28 deals.
At the close of transactions, Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc, which exchanged 2.3 billion units valued at N6.5 billion, and CSCS Plc with 73.9 million units transacted for N5.2 billion.
GNI Plc also closed the trading day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
