Kayode Tokede
BUA Cement Plc announced N67.23 billion profit before tax in 2023 financial year, a decline of 44per cent from N120.15 billion reported in 2022, attributable to N69.96 billion foreign exchange loss in 2023 audited result and accounts from N5.5 billion reported in 2022.
The cement producing company also declared a profit after tax of N69.45 billion in 2023 from N101.01 billion in 2022, on the backdrop of N2.23 billion income and deferred tax credit posted in 2023 from N19.14 billion tax expenses reported in 2022.
Amid the decline in profits, the board of directors of BUA Cement recommended for the approval of shareholders a payment of N2.00 dividend per 1 ordinary share of 50 kobo each, out of the profits declared in the financial year ended 2023 (2022: N2.80kobo).
Despite growing revenue by 27.4per cent to N459.99 billion in 2023, the latest audited result and accounts of BUA showed a challenging business environment amid significant increase in cost of production, and operating expenses.
The breakdown of revenue revealed that sale of bagged cement increased to N458.05 billion in 2023 from N359.08 billion in 2022, while sale of bulk cement closed 2023 at N1.95billion from N1.91 billion in 2022.
Primary geographical markets of BUA Cement indicated that revenue from Nigeria stood at N456.08 billion in 2023 from N356.61 billion in 2022, while revenue outside Nigeria dropped to N3.9 billion in 2023 from N4.38billion declared in 2022.
With the devaluation of the Naira last June and its continued depreciation, as well as growing inflation, the Company faced increasing price pressures which impacted production costs, as these increased to N276.04 billion in 2023, a growth of 39.15per cent from N198.38 billion in 2022.
BUA Cement’s reported N123.27 billon energy consumption in 2023 from N91.19 billion in 2022, contributing about 44.7per cent of the overall cost of sales in 2023 from 45.97per cent in 2022.
In addition, a net foreign exchange loss of N70 billion (2022: N5.5 billion) was recorded; with N52.5 billion attributed to finance costs, associated with the construction of the additional 3mmtpa lines at Obu and Sokoto (incl. other ancillary activities) and the sum of N17.5 billion attributed to foreign trade payables.
As total operating expenses rise to N41.36 billion in 2023, a growth of 37 per cent from N30.17 billion in 2022, finance cost closed 2023 at N19.94 billion in 2023, representing a growth of 89 per cent from N10.55 billion reported in 2022.
BUA Cement is Nigeria’s second largest cement company and the largest producer in its North-West, SouthSouth and South-East regions; with a combined installed capacity of 11 mmtpa and with plans underway to increase existing capacity to 17 mmtpa through the commissioning of two new lines. BUA Cement operates strategically from Okpella, Edo State and Kalambaina, Sokoto State.
BUA’s Cement N418.16bn borrowings
The company’s total borrowings increased to N418.16 billion in 2023, a growth of 233per cent from N billion borrowed in 20222.
BUA Cement’s long-term borrowing stood at N295.47 billion in 2023, representing an increase of 560.4 per cent from N44.74 billion in 2022, while short-term borrowings closed 2023 at N122.69 billion, a growth of 52 per cent from N80.7 billion in 2022.
On this, BUA Cement total liabilities closed 2023 at N830.46 billion from N462.9 billion declared in 2022.
The group, however, reported N1.22 trillion total assets in 2023, representing an increase of 39 per cent from N874 billion reported in 2022.
The breakdown of total assets showed that Non-current assets moved from N676.24billion in 2022 to N816.44 billion posted in 2023, while current assets rise to N399.25 billion in 2023 from N197.77 billion in 2022.
Conclusion
The Managing Director/ CEO, BUA Cement, Mr. Yusuf Binji in a statement said, “Clearly, the operating environment in 2023 was challenging, given the different headwinds confronted with at the start of the year and especially with the devaluation of the Naira.
‘During the year, we launched the maiden edition of the BUA Cement Scratch and Win promo., among other initiatives, which saw BUA Cement further increase its share of the market and resulted t a 27.4per cent rise in revenues to N460 billion from N361 billion in the prior year.
‘In addition, we cold commissioned the new 3mmtpa lines at the Sokoto and Obu Plants, activated a new 70MW gas power plant in Sokoto and eagerly await the activation of the 70MW gas power plant at Obu during the first quarter of 2024. Apart from these, we took delivery of over 500 trucks to support our distribution activities, which further deepened our market presence.
“We believe these investments further ‘Reinforces our Purpose,’ which is to be ‘A highly competitive leader in Nigeria’, as we address not only the housing and infrastructure needs in a sustainable manner, but also seek out innovative ways to making cement affordable”.
On the Financial Performance, the Chief Financial Officer, Jacques Piekarski said: “Our financial performance in 2023 was indeed resilient given the economic environment, led by the devaluation of the Naira.
‘’But despite the reported foreign exchange loss, EBITDA increased by 9.6per cent to N169.3 billion from N154.5 billion in 2022. We are confident about the business, together with the evolving strategy to thrive.”