BUA Cement Plc has announced a 31.2 per cent drop in profit triggered by N69.96 biillion foreign exchange losses in financial year result and accounts for the full year ended December 31, 2023.
The cement manufacturing company declared N69.46 billiion profit in 2023, a decline of 31.2 per cent from N101.01billiion in 2022, while profit before tax stumbled to N67.23 billion in 2023, dropping by 44 per cent from N120.15billion reported in 2022.
Despite the challenging economic conditions that started with the Naira redesign policy, the Company posted a strong revenue growth of 27.4 per cent to N460 billion from N361 billion in 2022, resulting from an increasing market share.
However, 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 by 39.5 per cent to N276 billion from N197.9 billion in 2022.
In addition, a net foreign exchange loss of N70 billion from N5.5 billion in 2022 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. Nevertheless, the Company reported a net profit after tax of N69.5 billion.
The Managing Director of BUA Cement, 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 to a 27.4 per 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.”
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