Despite a seemingly harsh operating environment faced by businesses in 2022, seven of Nigeria’s leading conglomerates and manufacturers made record revenue in 2022 financial, according to analysis by The PUNCH.
Figures obtained from the companies’ full-year financial statements filed with the Nigerian Exchange showed Dangote Sugar Refinery, Dangote Cement, BUA Foods, BUA Cement, Lafarge Africa, Cadbury Nigeria, and Nestle Nigeria Plc raked in N3.6tn revenue in 2022.
In its two major holdings, Dangote Sugar and Refinery and Dangote Cement Plc, Dangote Industries Limited recorded a whooping N785bn.
For its sugar refinery, the N403bn recorded in 2022 showed a 46.07 per cent growth from the N276.05bn recorded in 2021
The Group Managing Director/Chief Executive Officer, Dangote Sugar Refinery Plc, Ravindra Singhvi, while speaking at the group’s 2022 full year audited results webcast event for investors and analysts, said that notable shocks in the operating environment included changes in global market dynamics fueled by the hike in international prices of raw sugar, forex unavailability, currency adjustment and a high inflation environment which caused an uptick in the cost of production.
Similarly, one of Dangote’s competitors — BUA Foods, in its unaudited financial statement for 2022 saw revenue grow by more than a quarter at N417.8bn. 65.5 per cent of that was contributed by sugar sales.
However, despite the surge in profit, the company said that a harsh operating environment, largely themed by flooding (which impacted on logistics efficiencies), energy cost, rising input costs, coupled with rising foreign exchange concerns and the tightening stance of the Central Bank of Nigeria which further increased interest rate affected the business negatively.
BUA Cement, on the other hand, grew its revenue by 40.3 per cent from N257.3bn in 2021 to N360.9 in 2022.
Similarly, Dangote Cement raked in N382bn, a 4.9 per cent improvement from the N364.44bn recorded in the previous year.
Yet another competitor who navigated through business headwinds to record impressive revenue was Lafarge Africa plc, which grew its revenue by 27.3 per cent from N293.1bn in 2021 to N373.2bn in 2022.
Together, the big three cement manufacturers — Dangote, BUA and Lafarge raked in N2.35tn in turnover in 2022. This represented a 21.6 per cent from the N1.93tn recorded in 2021.
It is important to note that despite improvement in revenue, the companies in review witnessed drop in volume of sales. However, increase in the prices of products consequently translated to increased revenue.
For example, Dangote Cement sold 27.77m tonnes of cement in 2022, which was 5.1 per cent lower than the 29.27m sold in 2021. However, despite this decline, revenue from sales increased by 17 per cent.
In the same vein, food, sweets, and drink company—Cadbury Nigeria Plc posted strong revenue growth in its revenue, which grew by 30 per cent from N42.37bn in 2021 to N55.21bn in 2022. The company said this was achieved despite rising inflation and the continued depreciation of the naira.
The growth in revenue was attributed to an increase in domestic sales.
The company’s direct rival, Nestlé Nigeria Plc recorded a 27 per cent revenue growth in its 2022 financial results, rising to N446.8bn as against N351.8bn recorded in 2021.
Speaking with The PUNCH, the Deputy-President of the Lagos Chamber of Commerce and Industry, Dr Gabriel Idahosa, described the healthy financial statements of the companies as a function of their ability to navigate through the harsh operating environment faced by average businesses.
He said the companies could have done far better if the several challenges plaguing the business environment had been addressed.
Idahosa said, “These are large organisations with the resources to contend with the risks and disruptions that typify the Nigerian economy. Starting with basic issues like power supply, most of those companies don’t live in the same power supply world as you and I or the vast majority of small and medium scale enterprises. They also have logistics to override whatever major issues we have.
“A small or medium size exporter, they have a lot of problems getting through the Nigerian ports, but Dangote will not. The likes of Lafarge will not. They will have their own way of getting through anything and everything that can stop them at the ports.”