By Bamidele Famoofo
WorldStage– Declining consumer spending due to rising food inflation slashed the revenue of BUA Foods Plc by 10.73 percent or N47.5 billion in first quarter of 2026 ended March 31. Revenue came in at ₦394.6 billion, a 10.73% decline from ₦442.1 billion in Q1 2025.
BUA Foods Plc , one of Nigeria’s biggest food and FMCG players, however, managed its cost base so effectively that despite earning less revenue, it made significantly more profit.
Cost of sales fell sharply by 22.12 percent to ₦218.9 billion, cutting the COGS margin from 63.6 percent to 55.5 percent.
Gross profit rose 9.16 percent to ₦175.6 billion, and gross margin expanded to 44.5 percent from 36.4 percent.
Operating expenses were held at ₦21.6 billion, down 3.59 percent despite inflationary pressures while the administrative expenses were slashed by 48.55 percent to ₦5.8 billion, more than offsetting a 42.32 percent increase in selling and distribution costs to ₦15.8 billion. Operating profit grew 11.32 percent to ₦154.7 billion, with operating margin improving to 39.2 percent from 31.4 percent.
Furthermore, the net finance costs fell 70.27 percent to ₦900 million from ₦3.0 billion in Q1 2025, as finance costs declined 72.30 percent to ₦1.0 billion. Profits before tax rose 12.74 percent to ₦153.8 billion, and with income tax expense growing only modestly by 3.00 percent to ₦11.4 billion, profit after tax climbed 13.60 percent to ₦142.3 billion. Earnings per share improved to ₦7.91 from ₦6.96.
Looking at the key ratios, it painted a flattering picture. Return on equity stood at 49.8 percent, return on assets at 36.6 percent, and net profit margin expanded to 36.1 percent from 28.3 percent.
The debt-to-equity ratio improved to 42.3 percent from 51.3 percent, reflecting continued balance sheet strengthening. Shareholders’ equity grew nearly 20 percent to ₦855.8 billion from ₦713.4 billion as at December 2025, while total assets rose 12.10 percent to ₦1.556 trillion. One item worth flagging is the sharp 25.69 percent increase in amounts due from related companies to ₦947.4 billion.
Investor sentiment on the firm is largely stable with the stock price holding firm at ₦967 per share as investors weigh the top-line softness against the impressive improvement beneath it.
