BUA Foods, the most cappitalised firm on the Nigerian Exchange (NGX), has outperformed industry peers to become the most profitable consumer goods firm in the nine-month period of 2025.
The food manufacturing giant defied Nigeria's inflationary and cost-heavy business environment, posting a profit margin of 29 percent with its after-tax profit rising to N405 billion, up from N261 billion reported in the same period of last year. Its gross profit also increased by 56 percent to N520.65 billion, signalling improved efficiency and cost management despite rising production costs.
Ayodele Abioye, the company's managing director, in its earnings report said, "BUA Foods' double-digit revenue growth and a 101% year-on-year increase in profit after tax underscore a sustained growth trajectory supported by ongoing economic reforms and a progressively more stable business environment."
"Amid an improving operating backdrop, we delivered another solid quarter of progress. We remain focused on executing our strategic priorities, deepening end-to-end integration across the value chain, and harnessing the expertise and commitment of our Board and employees to sustain value creation," he added.
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BUA Foods' diversified operations remain its strength, with the sugar and flour segments contributing about 42 percent to total revenue, while pasta and rice accounted for 10 percent and 6 percent, respectively.
By leveraging economies of scale and an integrated production model, the company has maintained cost leadership while ensuring steady product availability across Nigeria and export markets.
Industry comparison shows that BUA Foods remains ahead of its peers. Unilever Nigeria's profit margin rose to 13 percent from 10.6 percent a year earlier, while its revenue increased by 49.65 percent to N155.41 billion.
Other consumer goods firms, including Nestlé Nigeria, Cadbury Nigeria, International Breweries, and Nigerian Breweries, also reported profit recoveries, with net margins of 8.14 percent, 7.56 percent, 12.08 percent, and 8.17 percent, respectively.
However, analysts caution that maintaining such high margins may prove challenging amid persistent inflation, energy costs, and regulatory uncertainties.
According to investment and research firm CardinalStone, Nigeria's fast-moving consumer goods companies are expected to extend their profitability streak in the third quarter of 2025 as easing inflation, a firmer naira, and improving consumer confidence lift volumes and margins.
"We anticipate significant margin expansion across our FMCG coverage, supported by moderating input costs, stable foreign exchange conditions, and recovering household spending," analysts at CardinalStone wrote in a note to clients. "Volume recovery remains the dominant theme across food and beverage players."
A stronger naira and declining inflation are helping to reduce raw material and packaging costs, leading to a moderation in the cost-to-sales ratio and improved profitability.
The naira has, for most of 2025, maintained rare stability, climbing to a nine-month high buoyed by portfolio inflows, stronger FX reserves, and coordinated policies that have seen the currency decouple from fluctuation in oil prices.
The naira has for weeks traded below the "psychological" 1500/$ to close the market on Thursday at 1436.97 per dollar as confidence continues to build in Africa's most populous nation's economy.
Inflation has equally been taking a back seat, slowing for the sixth straight month to 18.02 percent in September 2025, the lowest it's been in three years.
"The stronger macroeconomic conditions are expected to boost the earnings of consumer goods firms," the CardinalStone report disclosed.