BUA Foods Plc, Nigeria’s second-largest consumer goods firm by market value, has grown its net profit by the most in at least six years, driven by strong demand across its product lines, a stable naira, and a return to foreign exchange gains after years of losses.
Net income for the six months through June doubled to N260.1 billion from N130.9 billion a year earlier, according to unaudited results published Wednesday. Revenue climbed 36 percent year-on-year to N912.5 billion, driven by higher sales in fortified sugar and bakery flour.
Earnings per share rose to N14.45, up from N7.27 in the same period of 2024.
Consumer goods firms are reaping big from an improved macroeconomic environment, buoyed by a more predictable currency and softening inflationary trend, which cooled to the lowest in almost two years in June 2025 to 22.2 percent.
Nigeria’s naira, prone to extreme volatility, has hovered around 1,550 to the dollar this year, helping provide stability to businesses like BUA Foods controlled by billionaire Abdul Samad Rabiu.
After booking a N54.7 billion forex loss a year earlier, BUA recorded a N407 million gain in H1 2025, amid a relatively stable naira and lower FX exposure. Finance costs rose 53 percent to N10.2 billion, reflecting continued pressure from interest rates despite a decline in total debt.
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Profitability improves, but cost signals emerge
Gross profit rose 55 percent to N339.3 billion, while operating profit was up 41 percent at N284.8 billion. That lifted net margin to 28.5 percent, from 19.5 percent a year ago. But selling and distribution expenses nearly doubled to N35.6 billion, indicating higher logistics and marketing costs in a volatile inflation environment.
The company’s return on equity rose to 37.7 percent, supported by strong earnings and a 60 percent increase in retained earnings over six months.
Debt down, liquidity up
BUA Foods cut total borrowings by N72 billion in the period, reducing the debt-to-equity ratio to 0.46x from 0.91x at the end of 2024. Net debt dropped to N284 billion, while cash and short-term deposits climbed to N40.9 billion.
The firm generated N144 billion in operating cash flow, down from ₦288 billion last year, partly reflecting higher working capital tied up in inventories and receivables.
Segment performance
Fortified sugar remained the top revenue earner at N303.8 billion, followed by bakery flour at N352.1 billion. Pasta and wheat bran added N96.9 billion and N21.2 billion, respectively.
With FX volatility easing and demand holding firm, BUA Foods enters the second half with momentum. But cost escalation and inflationary pressures may test margins going forward.
Analysts expect that tighter cost discipline will be necessary to sustain double-digit profit growth.
The company’s stock has gained over 10 percent this year on the Nigerian Exchange and closed at N459 per share on Wednesday.
