Despite the harsh operating business environment, five listed companies posted net profit of N91.186 billion in the first six months of their financial year ended June 30, 2022.
In the period under review, companies in Nigeria were facing high cost of doing business, foreign exchange restrictions, a hike in interest on borrowed funds due to 13 per cent Monetary Policy Rate (MPR) now currently 14 per cent and a double-digit inflation rate that have driven the cost of goods and service at astronomically level.
This shows that the Consumer Goods, Food Products sub-sector sustained strong profitability in spite of harsh operating environment in the period under review, as five listed companies, comprising of; BUA Foods, Dangote Sugar Refinery, NASCON Allied Industries, Cadbury Nigeria and Nestle Nigeria, grew their profit after tax to N91.186 billion, higher than N69.651 billion recorded in H1, 2021.
Specifically, the companies have been taking steps to increase their tempo of backward integration in recent times, which has helped in sourcing for raw material for production.
Analysing their performance, BUA Foods net profit rose by 13.76 per cent to N39.309 billion as against N34.561 billion in 2021. Dangote Sugar Refinery profit after tax rose by 6.6 per cent to N20.24 billion from N12.61 billion, while NASCON total profit for H1, 2022 amounted to N1.535 billion, higher than N1.450 billion in 2021.
Cadbury Nigeria moved from a loss position of N516.167 million in 2021 to a profit position of N2.342 million in H1, 2022, while Nestle Nigeria net profit stood at N27.76 billion from N21.03 billion in H1, 2021.
Recently, the chairman of BUA Foods, Abdulsamad Rabiu, said: “our business has remained resilient despite global economic challenges and plays a significant role in the FMCG industry. This was evidenced by the positive financial results recorded.”
Group managing director, Dangote Sugar Refinery Plc, Ravindra Singhvi, in his remarks, attributed the positive results in the half year to key trade interventions introduced during the year and positive market responses.
He said: “our impressive performance in the half year demonstrates our resilience in the face of prevalent challenges, which rightly reflected in strong topline growth shown in the financial results.”
According to Singhvi, “Dangote Sugar Refinery has continued to implement its sugar backward integration projects plans and the enhancement of its outgrowers Scheme to support the economic growth of the immediate communities. The aim is to develop a robust outgrower scheme with about 5,000 outgrowers when the projects have fully taken off, in addition to the achievement of other targets of its Sugar for Nigeria Project plan.
“The key focus is of the sugar refiner is achievement of the Dangote Sugar Backward Integration Projects targets and put Nigeria on the path of sugar self-sufficiency and the world sugar map.”
Meanwhile, the companies spent a huge sum on power in the period under review as the cost of energy surged significantly across most countries in the world.
The Manufacturers Association of Nigeria (MAN) warned that the high costs of diesel used by their members could lead to a high cost of goods and services due to escalating cost of production.
