BUA Foods profit doubles, but sugar and pasta face strain

BUA Foods Plc has reported a strong jump in earnings for the third quarter of 2025, even as its key sugar and pasta businesses show signs of weakness.

The company said profit after tax rose by 101% to ₦405 billion in the first nine months of the year, helped by higher sales from its flour and rice divisions. Revenue for the period climbed 33% to ₦1.42 trillion, while profit before tax also doubled to ₦432.6 billion, according to its unaudited results released November 3.

Flour was the main driver of growth, with revenue up 52% to ₦591 billion. The company’s new rice business also expanded sharply—from ₦1.6 billion last year to ₦79.5 billion—though that leap came from a very small base.

By contrast, sugar, long the company’s biggest earner, has started to slow. Sales rose just 10% in the period, dropping from more than half of group revenue last year to about 42% this year. Analysts say the slowdown may reflect weaker consumer demand and growing competition in the sweetener market.

Pasta, another major product line, also struggled. Revenue increased only 12%, slower than the pace of inflation, suggesting many consumers are cutting back or switching to cheaper food options as prices rise.

Rising cost

The company’s costs also climbed sharply. Selling and distribution expenses grew 82%, while administrative costs more than doubled. Other income, which had provided extra support in 2024, plunged by almost 98%, leaving little cushion against rising expenses.

Still, BUA Foods’ strong cash position and lower borrowing costs helped lift overall profit. Finance charges fell by 58%, and the company’s total assets rose 13% to ₦1.24 trillion, supported mostly by retained earnings.

The results highlight both BUA Foods’ strength and its growing challenges. Its diversification into flour and rice has boosted earnings, but sugar and pasta—the heart of its business—are under pressure from costs, competition, and weaker demand.

For now, the company’s balance sheet remains solid, but sustaining growth without eroding profit margins will be its biggest test as the year closes.