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BUA Cement Q1 profit rises by 26 per cent to N20 billion

08 Jun 2020, 02:47 pm
Financial Nigeria
BUA Cement Q1 profit rises by 26 per cent to N20 billion

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BUA Cement reported a 26.2 per cent rise in profit after tax in Q1 2020 due to increased capacity output and growing market acceptance.

BUA Group headquarters, Lagos

BUA Cement Plc, the second largest cement company in Nigeria, has released its unaudited financial statements for the period ended 31 March, 2020, showing a 25.1 per cent increase in its revenue to N54 billion compared to N43.1 billion reported in the first quarter of 2019. The financial statements, filed today on the Nigerian Stock Exchange (NSE), also show a 26.2 per cent rise in the company’s profit after tax (PAT) for the period, due to increased capacity output and growing market acceptance.

According to a statement sent to Financial Nigeria today by BUA Cement – a subsidiary of BUA Group, one of Africa’s largest infrastructure companies – the PAT rose from N15.7 billion reported in Q1 2019 to N19.8 billion in Q1 2020. The cement company also delivered improved earnings per share (EPS) of 58 kobo in the current reporting period, up 26.1 per cent from the 46 kobo EPS declared in Q1 2019.

The company disclosed that its earnings before interest, tax, depreciation and amortization (EBITDA) in Q1 2020 increased by 16.7 per cent to N24.6 billion, compared to N21.1 billion reported in Q1 2019. However, its EBITDA margin – a measure of a company's operating profit as a percentage of its revenue – declined from 48.9 per cent in Q1 2019 to 45.6 per cent in Q1 2020, arising from the continued push into new markets.

“Clearly, our strong showing epitomises the effect of further growth in output but most importantly, a growing appreciation of the value and service offering we continue to afford customers in the market place: with sales revenue increasing by 25.1% (y/y) to N54 billion," said Yusuf Binji, Managing Director/CEO of BUA Cement. "We continue to anticipate changes to customer and market behaviour, aimed at further strengthening our value model, even as we continue our push into new markets."

The cement company currently has a combined installed capacity of 8 million metric tonnes per annum (mmtpa), up from 5 mmtpa reported at the end of Q1 2019. According to the statement by BUA Cement, its cement volume dispatched in the first quarter of this year was up by 20 per cent, rising to 1,328 metric kiloton (kt), compared to last year's volume of 1,107 kt.

The company’s assets include the Obu Cement I & II plants in Okpella, Edo State; the Edo Cement Plant; the Kalambaina Cement Plant and the Sokoto Cement Plant. Last year, the company merged its Kalambaina asset with the Cement Company of Northern Nigeria (CCNN). The group has plans underway to increase existing capacity to 11 mmtpa, through the commissioning of a new 3 mmtpa plant by the first half of 2021 in Sokoto State.

BUA Cement said it has implemented a COVID-19 business continuity plan amid the global outbreak of the coronavirus disease.

“In response to the global pandemic, we implemented our COVID business continuity programme, built into our corporate governance framework. This minimises disruptions along the value chain; prioritises the safety of workers and customers; and assesses probable scenarios a prolonged lockdown would have on the business,” Binji added.

Established in 1988, BUA Group has operations in real estate, steel, ports and terminals, sugar and agribusiness.

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