The board of BUA Cement, on Thursday gave shareholders a reason to celebrate when it presented its audited financials for the year ended December 31, 2023, the high point of which was the proposal of a dividend, despite N70 billion, 39.5% rise in production costs, despite which the directors have proposed a dividend of N2 per share. This represented almost all of the N2.05 Earnings Per Share.

According to the result presented to the Nigerian Exchange Limited, revenue from sales improved by 27.4% to N459.998bn, from N360.989bn; while cost of sales jumped from N198.379bn to N276.043bn, in what the company blamed on the challenging economic conditions that started with the Naira redesign policy. Cost of sales was driven mainly by energy consumption which amounted to N123.269bn, up from N91.185bn; while operation and maintenance service charges recorded the biggest increase from N46.44bn to N87.415bn.

However, with the devaluation of the Naira last June and its continued depreciation, as well as growing inflation, the company, the statement noted, faced increasing price pressures which impacted production costs.

Consequently, gross profit recorded a marginal rise from N162.609bn to N183.955bn. Administrative expenses increased to N12.296bn from N10.492bn; foreign exchange loss was a significant N69.956bn from just N5.501bn, a breakdown of which the company explained included N52.5bn attributed to finance costs associated with the construction of the additional three million metric tons per annum capacity lines at Obu and Sokoto (including other ancillary activities) and the sum of N17.5bn attributed to foreign trade payables. Specifically, net foreign exchange loss on borrowings stood at N60.666bn; net loss on other forex transactions rose to N17.175bn from just N5.501bn; while forex loss capitalised for the period was N8.183bn.

Distribution and selling expenses also saored to N29.068bn from N19.681bn; while other income including sundry income, insurance claims, amortisation of government grant and modification gain, was flat at N2.062bn from N2.785bn, resulting in an operating profit of N74.697bn, down from the previous N129.719bn.

Finance income (interest income) increased to N12.882bn from N1.941bn; finance cost stood at N19.936bn from N10.553bn being the N8.816bn interest expense on debt security issued, down from the previous year’s N9bn, just as interest expense on borrowings soared to N36.642bn from just N6.674bn. This resulted in net finance cost of N7.054bn from N8.553bn.

Profit before tax for the period amounted to N67.228bn, a significant drop from the previous N120.154bn; a differed tax credit of N2.226bn raised the profit after tax to N69.454bn, compared to the N19.143bn tax expense that left the 2022 net profit at N101.01bn

Commenting on the performance, the Managing Director/CEO, Yusuf Binji noted the challenging operating environment in 2023, “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,” he said.

Continuing, the MD expressed belief “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.”

The Chief Financial Officer, Jacques Piekarski described the performance in 2023 as “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 N169.3bn from N154.5bn in 2022.”

He expressed confidence “about the business, together with the evolving strategy to thrive.”