BUA Foods profit rises to N450bn despite revenue decline

BUA Foods Plc recorded a profit after tax of N450.47bn in the first nine months of 2026, representing an 11.15 per cent increase from N405.27bn in the corresponding period of 2025, despite a 19 per cent decline in revenue.

The food manufacturing company disclosed this in its unaudited financial results for the nine months ended September 30, 2026, released on Friday, attributing the improved profitability to lower production costs, reduced operating expenses and a more stable foreign exchange environment.

It read, “The strong margin performance supported an 11 per cent year-on-year increase in profit after tax to N450.47bn, up from N405.27bn in the corresponding period of 2025.”

Commenting on the performance, the Managing Director of BUA Foods, Ayodele Abioye, said, “Despite a 19 per cent decline in revenue to N1.15tn, driven by softer pricing conditions and subdued consumer demand, we maintained a substantial improvement in profitability through effective cost optimisation, improved productivity and rigorous execution across the business.”

An analysis of the results showed that the company’s revenue declined to N1.15tn from approximately N1.42tn in the corresponding period of 2025, indicating a reduction of about N270bn.

However, gross profit increased by 6.19 per cent to N552.90bn from N520.65bn, representing an additional N32.25bn despite the decline in sales.

The improvement was driven largely by a reduction in the cost of sales, which fell by 34 per cent to N592.94bn.

Consequently, the company’s gross profit margin expanded to 48.3 per cent from 36.7 per cent in the corresponding period of 2025, an increase of 11.6 percentage points.

This indicates that BUA Foods retained approximately N48.30 as gross profit from every N100 generated in revenue, compared with N36.70 a year earlier.

The company’s operating expenses also declined by 20 per cent to N66.99bn from N83.65bn, representing savings of N16.66bn.

A breakdown showed that selling and distribution expenses fell by 15 per cent to N45.04bn, while administrative expenses decreased by 28 per cent to N21.95bn.

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These reductions contributed to an improvement in operating profit margin to 43 per cent from 31 per cent, representing a 12-percentage-point increase.

Profit before tax rose by 11 per cent to N480.52bn, while earnings per share increased to N25.03 from N22.52, reflecting higher earnings attributable to shareholders.

The results suggest that BUA Foods’ improved profitability during the period was driven primarily by cost reductions and wider margins rather than revenue growth.

The decline in revenue also points to weaker consumer demand and softer selling prices, highlighting the challenges facing food manufacturers despite improvements in operating efficiency.

Abioye said the company would continue investing in distribution capabilities and strengthening its market presence to support future growth.

He added, “Our nine-month 2026 results demonstrate the resilience of BUA Foods’ operating model and the benefits of disciplined cost and margin management.

“Looking ahead, we remain focused on driving profitable growth, enhancing market penetration and maintaining operational efficiency.”

The managing director expressed confidence that the company’s production capacity, established brands and distribution network would support its operations despite uncertainties in the business environment.

BUA Foods, which is listed on the Nigerian Exchange Limited, operates in the sugar, flour, pasta, rice and edible oils segments.

The company said its priorities for the remainder of the year included maintaining cost discipline, strengthening supply chains and expanding market penetration.