Sunbeth – a very fast car with interesting brakes, a deeper dive into its numbers

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.

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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.

**The associate: Quiet outperformer **

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.

**The leverage picture – where the conversation gets serious **

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 good news on gearing **

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.

**The less comfortable news: What the interest bill actually looks like **

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: **

• Interest on bank loans — ₦38.1bn.
• Interest on overdraft — ₦3.0bn.
• Interest on contract liabilities — ₦5.5bn.
• Realised FX losses — ₦2.4bn.
• Unrealised FX losses — ₦10.0bn.
• Total: ₦59.1bn.

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.

**The cash flow reality: The number that matters most **

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.

The business is, in a very real sense, writing cheques with its income statement that only the banking system is currently able to cash.

The FY2024 financing activities tell the story: ₦340bn in new loan proceeds, ₦256bn in repayments, ₦29.5bn in interest paid.

The company processed almost ₦600bn in loan movements in a single year. That is an extraordinary volume of banking activity. None of this is disqualifying; it describes almost every high-growth commodity trader you have ever looked at.

What it does mean is that the commercial paper programme is not being supported by surplus free cash flow.

It is being supported by the confidence that the banking relationships hold, the commodity cycle remains favourable, and the receivables book keeps converting. Investors considering the CP should understand that dynamic clearly.

**Related parties – the section that needs a longer conversation **

Trade and other receivables at 31 December 2024 stood at ₦146.5bn. Of that, ₦94.7bn or 65% of the total receivables book represents amounts owed by related parties.

For a company whose stated business is exporting cocoa and cashew to external customers, this is an unusual asset profile,e and it warrants examination.

**Sunbeth Energies: The elephant in the room **

The core question: Sunbeth Global Concepts Limited trades agricultural commodities. Sunbeth Energies Limited is, by every reasonable inference, an energy company.

The receivable due from Sunbeth Energies grew from ₦8.4bn at end-2023 to ₦78.0bn at end-2024, an increase of nearly ₦70bn in a single year. The accounts describe the nature of this transaction as ‘Services.’ That is the entirety of the disclosure.

Investors considering the CP programme are, in effect, being asked to take comfort in a balance sheet where the largest single asset is a receivable from an energy business, supported by a one-word description. What we are flagging is a disclosure gap that matters in the context of a capital raise.

What services does an agricultural trader provide to an energy company at ₦78bn? Are these arm’s-length transactions? Is this balance interest-bearing? What are the repayment terms? These are questions that any reasonable CP investor will ask, and the answers should be available before money is committed, not after.

The transfer pricing dimension is also important. Related party transactions at this scale, between entities under common control and across business lines with no apparent commercial overlap, create the conditions for value transfer (intentional or otherwise) between entities.

The accounts do not disclose any transfer pricing policy or arm’s-length benchmarking. At ₦78bn, the absence of that disclosure is not a minor oversight.

**The impairment reversal: A note of curiosity **

In FY2023, the company recognised ₦10.5bn in total impairment (₦9.8bn on trade receivables and ₦448m on related party balances). In FY2024, the entire ₦10.5bn was reversed as a write-back, contributing materially to the FY2024 P&L.

Write-backs are legitimate when circumstances genuinely improve. What is worth noting is that this single line item swung from negative ₦10.5bn in FY2023 to positive ₦10.5bn in FY2024, a ₦21bn P&L impact across two years.

We are not saying this is wrong. We are saying it is the kind of item that any investor should understand in granular detail.

**Corporate Governance – improving Board Evolution: From Founder-Led to Formally Structured **

This is probably a non-issue, but we need to flag it and have a conversation about it. We looked at FY2024 account and Management presentation, and there was a material change of more than half of its board members in one cycle, which saw the chairman and other board members depart.

Institutional memory and knowledge are big for a business growing at this speed. What was the urgency for them to all leave at the same time?

By the presentation, we now have  3 women on the board.  For a Nigerian private company, that is a genuinely progressive governance posture, and we credit it for the gender equality.

That said, the cadence of board arrivals and departures is worth noting. The company is going through a period of significant management evolution at precisely the moment it is scaling fastest. Continuity of institutional knowledge is not a theoretical concern; it is a practical one when your banking relationships, customer contracts, and operational execution are all running at peak intensity.

The CFO File: The FY2023 Annual Report was signed by Amos Kpesu as CFO. The FY2024 Annual Report was signed by Chukwunonso Ohaneje as CFO.

The investor presentation references a different individual as CFO. Three different people, three different documents, one title.

We are not in a position to know the full context, and interim arrangements, planned transitions, and timing gaps are all plausible explanations. What we can say is that financial leadership continuity is a reasonable area of enquiry, and the answer should be clear and consistent.

We also note the departure of the COO and the appointment of a new one. ALOT of moving parts

**The transaction **

Commercial paper is short-duration, unsecured debt. The buyer is trusting that the issuer’s operating business will generate sufficient liquidity to repay them at maturity.

For Sunbeth, the relevant question is simple to state and less simple to answer: where does the repayment come from?

The operating cash flow is negative. The profit is real,l but does not convert to cash at the pace the business consumes it. The banking relationships are the primary mechanism through which the working capital cycle is funded.

If the CP is intended to replace or supplement some portion of the banking draw, that is a rational structure, and investors should understand that explicitly, not infer it.

Sunbeth Global Concepts is a genuinely interesting credit story. The commercial momentum is real, and the fundamentals of the cocoa and cashew trading business appear sound. The management team has executed something remarkable in a difficult macro environment, navigating naira devaluation, interest rate pressure, and logistical complexity at a scale that has grown by an order of magnitude.

But it is also a company that is moving very fast, carrying significant financial leverage, and currently has a number of questions sitting in its accounts that need clear answers before institutional money should comfortably arrive. The related party book, the leverage cost, the CFO continuity, and the operational cash flow profile are not footnotes; they are the main text.

The title of this note is Sunbeth, a very fast car with interesting brakes for a reason.  That is meant with genuine respect. Fast cars are not bad investments; they are often exceptional ones. You just want to understand the braking system before you enter the motorway.