New Cement Price Emerges as BUA Announces Decline in Profit Amid Foreign Exchange Loss
- BUA Cement has announced a decline in profits, weeks after slashing its cement price due to the federal government's intervention
- The company announced a profit before tax of N67.23 billion for the 2024 fiscal year
- It said its operations were heavily impacted by the naira devaluation, leading to foreign exchange losses for the period under review
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
A few weeks after announcing a price slash due to the federal government's intervention, one of Nigeria's biggest cement manufacturers, BUA Cement, declared a N67.23 billion profit before tax for 2023.
The company said it recorded a decline of 44% from the N120.15 billion reported in 2022, attributing it to N69.96 billion foreign exchange loss in 2023 from the N5.5 billion reported in 2022.
Source: UGC
BUA approves juicy dividends for shareholders
The cement firm also declared a profit after tax of N69.45 billion in 2023 from N101.01 billion in 2022, amid N2.23 billion income announced and deferred tax credit posted in 2023 from N19.14 billion tax expenses reported in 2022.
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ThisDay reports that the cement firm's board of directors recommended for shareholders' approval a payment of N2.00 dividend per share of 50 kobo each out of the profits declared in the financial year 2022.
Despite increasing revenue by 27.4% to N459.99 billion in 2023, BUA's new audited results and accounts indicate a challenging business terrain due to increased production costs and operating environment.
The analysis of the company's revenue showed that the sale of bagged cement rose to N458.05 billion in 2023 from N359.08 billion in 2022, while the sale of bulk cement for 2023 rose to N1.95 billion from N1.91 billion recorded in 2022.
BUA reports high energy consumption costs
The company's revenue from Nigeria stood at N456.08 billion in 2023 from N356.61 billion in 2022, while revenue outside Nigeria dipped to N3.9 billion from N4.38 billion announced in 2022.
The naira devaluation in June last year led to its depreciation against major currencies, and inflation impacted the company's production costs, increasing it to N276.04 billion in 2023, representing a rise of 39.15% from N198.38 billion in 2022.
BUA cement reported N123.27 billion in energy consumption in 2023 from N91.19 billion in 2022, contributing about 44.7% of the overall cost of sales in the period under review from 45.97% recorded in 2022.
Recall that Nigeria's three cement manufacturers, including BUA Cement, Dangote Cement and Lafarge Africa, agreed to lower their cement prices to N8,000 and N7,000 following a meeting with the Nigerian government.
A recent report by Legit.ng indicates that manufacturers have already begun selling the product at a reduced rate in some parts of the country.
BUA Cement had initially announced a price slash of its cement to N3,500. The company blamed market forces for the non-implementation of the price.
BUA approves 50% increase in workers' salaries
Legit.ng earlier reported that Abdul Samad Rabiu, the head of BUA Group, approved a massive 50% rise in staff compensation across his conglomerate, which is a significant step in prioritising employees' welfare.
The decision was made public through an internal memo from BUA Group's head of human resources, Mohammed Wali.
It followed reports that the price of a 50kg bag of cement rose to about N9,500 in many parts of Lagos and around the country amid the biting effect of inflation in Nigeria.
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Source: Legit.ng
