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Revenue: The numbers are not shy

Revenue went from ₦40.3bn in FY2022 to ₦119.6bn in FY2023 to ₦510bn in FY2024.

To put that in perspective: the FY2024 revenue alone is more than twelve times what this company turned over just two years prior.

The export component (cocoa and cashew shipped internationally) drove the lion’s share, reaching ₦480.5bn in FY2024 versus ₦92.3bn in FY2023. Warehouses, logistics, buying agents, shipping slots, these things cost real money and require real execution. Sunbeth is executing.

What makes this more compelling is that gross margins have simultaneously recovered. In FY2022, the company was loss-making at the gross level, purchasing cocoa and cashew for more than it sold them for, a situation that speaks either to a temporarily unfavourable commodity cycle or to a business still finding its commercial footing.

By FY2024, gross profit is ₦112bn on ₦510bn in revenue, a 22% gross margin that is entirely respectable for a bulk agricultural commodity trader operating in this market structure.

One of the genuinely pleasant surprises in these accounts is Sunbeth’s 40% stake in Sunbeth Treenuts and Sesame Limited.

Acquired in May 2023 for the princely sum of ₦4 million, the stake generated an equity-accounted profit contribution of ₦2.13bn in FY2024 alone, a return on the seed investment that most private equity firms would accept without complaint.

The associate’s own revenue hit ₦21bn in FY2024, and its net assets stand at ₦5.85bn. This is a real business performing well, and it validates the group’s thesis that there is a commercial opportunity in adjacent commodity streams beyond the core cocoa and cashew book.

We want to be measured here, because commodity traders are supposed to carry debt. Trade finance is the oxygen of this business model. You borrow to purchase inventory, inventory converts to receivables, receivables convert to cash, and you repay.

The cycle, in theory, is self-liquidating. The question is always: at what cost, at what speed, and with how much margin for error if something in that chain snags?

The gearing trajectory is, in isolation, a meaningful positive. Going from 713% net debt to equity in FY2022 to 205% in FY2024 is genuine deleveraging, which was achieved through a combination of profit retention and a ₦23bn capital contribution by the shareholders injected during FY2024.

That capital contribution, while pending formal conversion to share capital at the CAC, is accounted for as equity. The Board has not declared a single naira in dividends across the three-year period. All earnings are staying in the business. That is the right capital discipline for a company in this growth phase.

Here is the part that will generate questions from your more arithmetically minds.

Total gross finance costs in FY2024 were ₦59.1bn. Profit before tax was ₦51.0bn. Which means that, in gross terms, the company’s interest bill exceeded its reported profit.

The business earned more than enough operationally to cover this; operating profit was a healthy ₦105.2bn, but the point is that 55% of operating profit was consumed by the cost of funding before shareholders saw a single kobo. This is the price of growing a commodity trading book from ₦40bn to ₦510bn in 24 months.

A breakdown of the FY2024 finance cost is instructive: 

The FX component alone (₦12.4bn combined) reflects the twin risk of transacting in dollars while funding in naira, a structural mismatch that did not bite particularly hard in FY2022 but is now material.

This is the central tension in the Sunbeth story, and it is important to understand it clearly. Net profit for FY2024 was ₦49.4bn. Cash consumed by operating activities in FY2024 was negative ₦60.5bn.

That gap, a swing of over ₦110bn between accounting profit and operating cash generation, is not unusual in a fast-growing commodity trading business, but it is significant. It reflects a working capital structure that is scaling rapidly.