The company reported that it achieved the feat because of an increasing market share, despite what it described as "challenging economic conditions that started with the Naira redesign policy."
The BUA Cement Plc has posted a strong revenue growth of 27.4% to N460 billion in 2023, according to audited financial results for 12 months that ended in December 2023.
The company reported that it achieved the feat because of an increasing market share, despite what it described as "challenging economic conditions that started with the Naira redesign policy."
The company reported a profit after tax of N69.45 billion for the financial year ended December 2023, representing a 31.2% decline year-on-year, which it blamed largely due to a foreign exchange loss of N69.95 billion—an increase from N5.50 billion recorded in 2022.
Like most manufacturing companies in Nigeria, BUA Cement experienced profit declines as a result of the impact of the naira’s depreciation following the reunification of the exchange rate announced mid-last year.
This is contained in a statement titled: "BUA Cement Plc releases audited financial results for the 12-month period ended December 2023; records strong revenue growth of 27.4% to N460 billion; impacted by foreign exchange losses due to devaluation of the naira," released on Thursday.
In the statement, the company said that with the devaluation of the Naira last June and its continued depreciation, as well as growing inflation, it has faced increasing price pressures which it said has impacted production costs, "as these increased by 39.5% to N276 billion (2022: N197.9 billion)."
"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. Nevertheless, the Company reported a net profit after tax of N69.5 billion," the firm noted.
The statement, however, quoted the Managing Director/CEO, Yusuf Binji to have 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% 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 9.6% to N169.3 billion from N154.5 billion in 2022. We are confident about the business, together with the evolving strategy to thrive.”
It noted that revenue increased to N459.99 billion from N360.98 billion in 2022, +27.75% YoY; gross profit increased to N183.95 billion from N162.60 billion in 2022, +13% YoY; operating profit went down to N74.69 billion from N129.71 billion in 2022; and profit after tax went down to N69.45 billion from N101.01 billion in 2022, –31.2% YoY.
Meanwhile, BUA Cement and other cement companies in the country over the last few weeks ago have drastically increased the prices of cement.
SaharaReporters also reported last week that cement manufacturers spelt out the conditions that the Nigerian government must fulfil before they would reduce the price of a 50kg bag of cement to N7,000 and N8,000 at a retail price.
The manufacturers claimed that the price drop from the current market price of over N10,000 would depend on the fulfilment of certain government interventions to ameliorate critical challenges faced in the industry.