Vitafoam Nigeria’s profit jumps 47% on cost efficiency

Vitafoam Nigeria Plc has reported a 46.6% increase in group profit after tax (PAT) to N21.31 billion for the financial year ended September 30, 2026. This is up from N14.54 billion in the corresponding period of 2025. The company’s improved cost management and stronger operating performance drove the earnings growth, despite a relatively moderate 5.4% revenue increase to N117.36 billion, highlighting its ability to convert a greater proportion of sales into profit.

This efficiency is further showed by the 41.5% increase in gross profit to N16.22 billion in the fourth quarter, despite a slight revenue decline, demonstrating robust cost control in production and sales.

Cost Efficiency Drives Profit Growth

An analysis of the company’s unaudited consolidated financial statements shows that gross profit rose by 20.6% to N49.40 billion. This is compared to N40.96 billion in the previous financial year. Gross profit margin improved to approximately 42.1% from 36.8%, reflecting better cost efficiency in the company’s production and sales operations. Cost of sales declined by 3.5% to N67.96 billion from N70.42 billion, despite the increase in revenue, providing a significant boost to gross earnings.

Operating profit also recorded a strong performance, rising by 21.5% to N33.15 billion from N27.28 billion in the corresponding period of 2025. However, administrative expenses increased by 24.9% to N13.02 billion from N10.42 billion, while distribution expenses rose by 8.9% to N4.45 billion from N4.08 billion, reflecting higher operating costs during the period. Despite these increases, the company’s ability to manage costs effectively contributed to the overall profit growth.

Finance Costs Decline, Cash Flow Improves

A substantial reduction in finance costs contributed significantly to the growth in profit before taxation (PBT). Finance costs declined to N973.84 million from N5.81 billion, representing an 83.2% decrease. This contributed to a 51.2% growth in PBT, which rose to N32.48 billion from N21.48 billion. Following a tax charge of N11.16 billion, profit after taxation increased to N21.31 billion.

Vitafoam’s cash flow statement indicates stronger cash generation from operating activities. Net operating cash flow rose to N25.70 billion from N14.63 billion in the preceding financial year, reflecting improved liquidity and operational efficiency. Profit before taxation advanced by 59.1% to N11.71 billion from N7.36 billion, while quarterly profit after tax grew by 56.1% to N7.73 billion from N4.97 billion, further emphasizing the company’s financial health.

Sustainability of Performance Key for Investors

The company’s cash and cash equivalents also increased to N20.71 billion at the end of September 2026, compared with N9.02 billion a year earlier, providing a stronger financial cushion. Total group shareholders’ equity, including non-controlling interests, increased to N51.71 billion from N35.55 billion, representing a 45.5% improvement. Retained earnings also rose to N42.02 billion from N25.87 billion, reflecting the contribution of the year’s improved profitability, notwithstanding dividend distributions.

Profit attributable to equity holders of the parent company stood at N19.91 billion, compared with N13.51 billion in 2025, representing a 47.3% increase. In line with the improved earnings, earnings per share advanced to 1,591 kobo from 1,080 kobo, indicating stronger earnings attributable to shareholders.