The cost of sales for 10 manufacturing and consumer goods companies in Nigeria surged to N665.95bn in 2024, reflecting a 72.47 per cent increase from N386.16bn recorded in 2023, The PUNCH gathered.

The company’s statement of profit or loss and other comprehensive income for the months ended December 31, 2024, filed on the Nigeria Exchange, recently revealed that the rise underscores the mounting pressure of inflation, foreign exchange volatility, and escalating production costs on the sector.

The cost of sales represents the direct expenses incurred in producing goods and services sold by a company. It includes costs such as raw materials, manufacturing expenses, and logistics.

The companies analysed include BUA Foods Plc, Guinness Nigeria Plc, UAC of Nigeria Plc, Fidson Healthcare Plc, Berger Paints Nigeria Plc, SCOA Nigeria Plc, Learn Africa Plc, Neimeth International Pharmaceuticals Plc, FTN Cocoa Processors Plc, and Honeywell Flour Mills Plc.

BUA Foods Plc recorded the highest cost of sales as its cost of sales soared to N248.15bn in 2024, marking a 76 per cent increase from N140.96bn in 2023.

Guinness Nigeria Plc followed closely, jumping to N200.60bn in 2024 from N96.66bn in 2023. The 107 per cent surge in production costs signals the pressure of inflation on raw material sourcing, packaging, and energy costs.

UAC of Nigeria Plc recorded an increase in its cost of sales, rising to N151.32bn in 2024 from N99.21bn in the previous year, representing a 52.5 per cent jump.

Fidson Healthcare Plc, a player in the pharmaceutical sector, reported N49.28bn in 2024, up from N31.98bn in 2023, reflecting a 54 per cent increase.

Berger Paints Nigeria Plc saw its cost of sales rise to N6.87bn in 2024 from N5.26bn in 2023, representing a 30.6 per cent increase.

SCOA Nigeria Plc recorded a decline, dropping to N4.38bn in 2024 from N9.20bn in 2023, reflecting a 52 per cent decrease.

Learn Africa Plc reported N2.18bn in 2024, up from N1.33bn in 2023, representing a 63.9 per cent increase.

Neimeth International Pharmaceuticals Plc recorded N2.48bn in 2024, compared to N1.48bn in 2023, reflecting a 67.5 per cent rise.

Similar to Fidson Healthcare, the company has been affected by the escalating costs of pharmaceutical ingredients, making drug production more expensive.

FTN Cocoa Processors Plc recorded N536.59m in 2024. However, there was no available figure for 2023 for comparison.

Honeywell Flour Mills Plc reported N248.58m in 2024, a rise from N100.51m in 2023, representing a 147 per cent increase.

Industry analysts warn that if manufacturers cannot offset rising costs with increased revenue, profit margins will continue to shrink, potentially leading to higher product prices, reduced dividend payouts, and operational downsizing.

The PUNCH reported that the National Bureau of Statistics has reported that Nigeria’s inflation rate rose to 34.80 per cent in December 2024, reflecting a slight increase from the 34.60 per cent recorded in November.

The PUNCH also reported that the Director General of MAN, Segun Ajayi-Kadir, has expressed concerns about how current economic realities presented no relief in sight for manufacturers who had been struggling with rising costs of production and decreased sales.


https://punchng.com/10-manufacturers-record-n666bn-cost-burden/