BUA Cement Profit Declines by 44% Amid Foreign Exchange Losses
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.
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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.
