Economy
Shareholders Laud BUA Foods for Almost 400% Rise in Stock Price
By Dipo Olowookere
The board and management of BUA Foods Plc have been praised for delivering value for shareholders, especially with its stock price appreciation since the company joined the Nigerian Exchange (NGX) Limited.
The organisation received the commendation at its second Annual General Meeting (AGM) last week at the Transcorp Hilton Hotel in Abuja.
At the event, shareholders approved the N4.50 dividend proposed by the board for the 2022 financial year, amounting to N81 billion.
One of the shareholders who spoke at the yearly gathering, Mr Umar Farouk, said the payment of the cash reward was commendable, applauding the board and management for upholding the vision, mission and values of the business as evidenced by the share price growth which has appreciated by almost 400 per cent since listing.
BUA Foods listed its shares by introduction on Wednesday, January 5, 2022, at N40 per share, and at the close of business on Friday, September 15, 2023, it traded at N185 per unit, representing a 362.5 per cent increase.
The Chairman of the firm, Mr Abdul Samad Rabiu, expressed his gratitude to the shareholders for their unwavering support, saying this has been instrumental in the company’s outstanding performance since its inception.
“Building on the successful merger of our different businesses in 2021, we achieved greater synergies and efficiency within the year, which resulted in a 30.9 per cent growth in our profit after tax.
“Despite the effects of global supply chain disruptions caused by the Russian-Ukraine conflict, we continued to intensify our effort in creating value and expanding our capabilities across all operating divisions; of particular mention is the commencement of commercial production of our Rice operations,” he noted.
“In respect of our expansion/growth strategy, we are commercializing our second flour & pasta plant with respective additional capacities of 800,000MTpa and 500,000MTpa, completing expansion work on our sugar refinery intended further to enhance our regional and global market expansion drive and looking forward to the contribution of our 200,000MTpa rice mill in Kano to the overall performance of the entity within the next fiscal year.
“We will continue to support the overall economic strategy of eat what we grow and grow what we eat through sustained investment in the expansion of our domestic cultivation of the raw material inputs through our 20,000-hectare sugar plantation in Lafiagi and our Paddy rice project to lessen dependence on imported raw materials,” the billionaire businessman added.
On his part, the Managing Director BUA Foods, Mr Ayodele Abioye, said, “We had a great financial year post-listing on the NGX, with our wealth creation journey remarkably boosted by the investing public and institutions’ participation. Year-end market capitalisation was N1.17 trillion from N720 billion.
“Despite the unending economic headwinds, our business delivered strong financial results characterized by revenue growth of 25.5 per cent to N418 billion from all operating divisions.
“Gross Profit grew by 29.0 per cent to N132.7 billion, while net profit grew to N91.3 billion from N69.8 billion in 2021. Earnings per share went up to N5.07, compared to N4.24 in the full year 2021.
“We will continue to drive our business growth, leveraging the commercialisation of additional capacities in our flour & pasta division as well as activating additional revenue generation from our rice division with a sustained focus on deepening our local and export market.
“We target to deliver double-digit growth across our core financial and operational performance metrics.”
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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