BUA Cement Offers N2.067 Dividend, As 2020 Net Profit Improves By 19.4%

The directors BUA Cement Plc, on Tuesday, presented its audited financials for the year ended December 31, 2020, showing that revenue rose by 18.11%, while net profit grew slightly faster at 19.35%.

The directors also recommended a dividend of N2.067 per share, from the N2.14 earnings per share; up by 18.11%, when compared to N1.75 each from N1.79 earned in the corresponding period of 2019. Profit growth was boosted among others by the N1.512bn or 28.27% drop in finance cost from N5.349bn to N3.836bn. The dividend will be paid electronically to shareholders whose names appear of members as of the close of business on July 9, 2021, which will be from July 12 to 16; while the payment is scheduled for July 23.

According to the report presented to the Nigerian Stock Exchange (NSE), revenue rose by N209.443bn, up from N175.518bn, with revenue from Nigeria amounted to N208.015bn or 99.31%, compared to N170.459bn or 97.11%. Of this, cost of sales increased by N20.889bn or 22.44%, from N94.075bn in the corresponding period of previous year. Gross profit, therefore, climbed from N82.443bn to N95.478bn.

Administrative expenses stayed flat at N10.32bn, as against the previous N10.516bn; distribution and selling expenses rose marginally to N4.867bn from N4.307bn; while impairment write back on financial assets dropped from N3.758bn to N1.355bn.

Total expenses for the period increased from N107.898bn to N129.152bn; driven mainly by energy consumption amounting to N43.054bn from N36.293bn; higher than the N21.279bn spent on raw materials, almost double of previous year’s N11.741bn; just as operation and maintenance service charge gulped N26.654bn, up from N25.411bn; among others.

Other income soared to N375.519m, as against the previous N50.248m; resulting in operating profit of N82.022bn, as against the N71.428bn.

Finance income improved significantly from N157m to N859.618m, being interest income from the company’s bank deposits for the period; while finance cost was driven primarily by the N13.159bn interest on funding from related party, which jumped from N2.326bn; while interest expense on bank loans amounting to N2.968bn, down from N3.132bn; resulting in net finance cost of N2.977bn, up from N5.192bn.

Profit before tax grew from N66.224bn to N78.873bn; income tax expense rose to N6.529bn from N5.614bn; following which net profit rose by N11.734bn from N60.61bn to N72.344bn.

The group had in a recent statement announced plans to grow total capacity to 20m metric tonnes per annum upon completion ongoing projects expected to further strengthen its competitive edge in the Nigerian market, with the commissioning of its new three million Metric Tonnes to its Sokoto Cement Plant this year. This is expected to result in bigger revenue, profit and dividend for the good of shareholders, among other stakeholders. This is in addition to the three new lines of 9m metric tonnes total capacity in Adamawa, Edo and Sokoto States by 2023, for which it recently signed an agreement with Sinoma CBMI.

The statement quoted the company’s Managing Director, Engr. Yusuf Binji, as saying recently that BUA Cement’s exceptional performance in the 2020 Financial Year, is a reflection of the continued value and strength of its brand and product offerings. For him, it is also a nod to the excellent implementation of the company’s business continuity plan which ensured that BUA Cement was able to withstand the impact of the pandemic throughout 2020.

Binji had earlier expressed BUA Cement’s optimism about the future, despite the prevailing economic conditions in 2020, “because it affords us not only with the opportunity to further evolve our business model but also provides an opportunity for accelerated development. We will continue to push to new markets aided by a focused distribution strategy.”

Recall that BUA Cement, in 2020, entered into strategic alliances for the supply of Liquefied Natural Gas (LNG) at its Kalambaina Plant, Sokoto State, and for the management of its mining operations. These, among other cost management efforts, the management believes would ensure BUA Cement continues to combine development and innovation into its activities, thereby driving efficiency, reduce operating costs and maximize profits.

The statement also quoted a recent interview by Abdul Samad Rabiu, Chairman of BUA Cement, where he assured that despite the strides made in the Nigerian Cement Industry in the past few years, there is still room for immense growth.

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