Engr (Dr.) Ayodele Abioye, the Managing Director, commented that the company is thrilled to have sustained a remarkable growth trajectory, underscoring the impact of our strategy, innovative product development, and steadfast commitment to quality, even in the face of challenging business climate.
He said, “Revenue grew by 104% to N1.07 trillion compared to last year, while our gross profit stands at N333.8 billion, reflecting a growth of 82%. We saw the benefits of our production capacity expansion and product innovation, as we witnessed an 11% growth in aggregate volume, further strengthening our position within the industry”.
He said, “Looking ahead, we will remain steadfast in addressing current food supply challenges by leveraging newly commercialized supply chain assets across our business divisions.” We would focus on driving internal efficiencies for business growth towards delivering long-term shareholder value.
We also thanked their stakeholders, particularly our customers and consumers, for their love for the brand even as we continue to nourish lives.
Key Highlights of Group performance and financial review of Q-3 un-audited.
Revenue grew by 104% y-o-y to ₦1.07. Trillion in 9M2024 (9M 2023: ₦524.4billion). This was due to a y-o-y increase of 73% in Sugar sales to ₦544.4 billion (9M 2023: ₦315.1 billion), 160% in Flour sales to ₦389.9 billion (9M 2023: ₦149.9 billion), and 131% in Pasta sales to ₦134.8 billion (9M 2023: ₦58.3 billion).
Cost of sales increased by (+116%) to ₦736.97 billion in 9M 2024 (9M 2023: ₦340.64 billion). An increase in raw materials costs and energy costs drove this. The high input cost environment and further devaluation of the Naira against the US Dollar weighed heavily on the prices of raw materials, resulting in a higher production cost.
Gross profit increased by 82% to ₦333.82 billion in 9M 2024 (9M 2023: ₦183.7 billion). However, gross profit margin depreciated by 400bps to 31% in 9M 2024 (9M 2023: 35%).
Selling and distribution expenses increased by 45% to ₦29.31 billion in 9M 2024 (9M 2023: ₦20.27 billion) due to an increase in the cost of diesel within the period.
Administrative expenses also increased by 84% to ₦14.54 billion in 9M 2024 (9M 2023: ₦7.91 billion)
Total operating expenses increased by 56% to ₦43.86 billion in 9M 2024 (9M 2023: ₦28.18 billion) due to increased selling and distribution costs along the supply chain to customers.
Operating profit grew by 101% to ₦315.12 billion in 9M 2024 (9M 2023: ₦156.88 billion), benefitting from top-line growth driven by price adjustment and volume increase due to increased demand for our flour and pasta products. Operating profit margin, however, dropped marginally by 100bps to 4% in 9M 2024 (9M 2023: 5%).
Finance fees were reduced by 6% to ₦11.50 billion in 9M 2024 (9M 2023: ₦12.20 billion) as we managed our finance cost.
Profit before tax increased by 94% to ₦215.65 billion in 9M 2024 (9M 2023: ₦111.40billion); however, profit before tax margin dropped to 20% in 9M 2024 (9M 2023: 21%)
Profit after tax grew by 91% to ₦201.38 billion in 9M 2024 (9M 2023: ₦105.6 billion), while the Earning per Share (EPS) grew by 91% to N11.19 in 9M 2024 from N5.87 in the corresponding period.
Total assets increased marginally by .06% to ₦1.071 trillion as of 9M 2024 (FY 2023: ₦1,070 billion), mainly driven by strategic transactions in trade and other receivables and capital investment.
Total liabilities decreased by 13% to ₦706.6 billion as of 9M 2024 (FY 2023: ₦808.38 billion).
Total equity increased by 39% to ₦364.45 billion as of 9M 2024 (FY 2023: ₦262.06 billion) mainly due to a growth of 40% in retained earnings to ₦356.3 billion as of 9M 2024 (FY 2023: ₦254 billion).
Operating segment performance
Sugar division: The Sugar division contributed 51% to revenue in 9M 2024 (9M 2023: 60%). Sugar Revenue grew by 73% to ₦544.4 billion in 9M 2024 (9M 2023: ₦315.1 billion). The increase in revenue is due majorly to price adjustments within the period. Volume sold decreased by 19% to 420,883 tons within the period (9M 2023: 517,274 tons).
Flour division: The Flour division contributed 36% to revenue in 9M 2024 (9M 2023: 29%). Revenue increased by 160% to ₦389.9 billion in 9M 2024 (9M 2023: ₦149.9 billion). The revenue growth is due to volume increase and price adjustment.
Pasta division: The Pasta division contributed 13% to revenue in 9M 2024 (9M 2023: 11.9%). Revenue increased by 131% to ₦134.8 billion in 9M 2024 (9M 2023: ₦58.3 billion). The increase in sales volume is due to the gradual commissioning of new pasta production lines. There was also a 27% increase in production volume to 115,933 tons in 9M 2024 (9M 2023: 91,519 tons).
Rice division: The commercialization of our rice business is beginning to see gains as its contribution to the revenue bucket picked up during the period. Revenue increased by 60% to ₦1.59 billion in 9M 2024 (9M 2023: ₦0.99 billion). There was also an increase in production volume to 1,328 Tons.