BUA Cement Plc posts strong numbers as revenue surged 19.3% y/y to N209.4bn in 2020 despite challenging business environment

• Proposes dividend of N2:067k to shareholders

Charles Abuede

BUA Cement Plc, a leading cement manufacturer and a subsidiary of BUA Group Plc has in its audited financial statement for the full-year 2020, announced a moderate improvement in its revenue from contracts with customers by 19.3 per cent year on year to N209.44 billion from N175.52 billion in 2019. The growth was broad-based and was driven by robust domestic market demand despite the challenging environment. The company revealed in its results filed to the Nigerian Stock Exchange.

According to audited results, driven by the need to prioritise efficiency led by innovation, a continued focus on cost containment measures and despite the devaluation of the Naira, which impacted pricing of some input costs, led to 14.8 per cent year on year gross profit growth to N95.48 billion in 2020 from N82.44 billion reported in the previous year while the cement manufacturer reported a 19.4 per cent year on year rise in its profit after tax (PAT) of N72.23 billion from N60.61 billion in the year before and 19.1 per cent year on year increase to N78.87 billion as the total profit before tax (PBT) in 2020 despite the challenging business environment and COVID-19 pandemic.

Yusuf Binji, the managing Director/CEO of BUA Cement Plc, while providing valuable insights to the company’s performance for the year pointed focus on preparedness and positive impact the activation of the company’s Business Continuity Plan had on performance. He added that it was even more noteworthy that significant milestones were attained despite the harsh economic conditions brought about by the pandemic.

“Undeniably, the challenges in 2020 have been unprecedented, given the outbreak of the Coronavirus and the disruption caused across homes, communities and organisations. Despite its lingering effect, we witnessed the best of humanity – resilience, as individuals and organisations sought for opportunities to support vulnerable communities, with BUA Cement playing a crucial role in cushioning its effect through its donations.

“Our performance for the year 2020 witnessed a 13.3 per cent rise in cement dispatched to 5.1mmt, which resulted in a 19.3 per cent rise in revenues to N209.4 billion; along with an 18 per cent rise in EBITDA to N96.8 billion from N82 billion, as at FY2019. EBITDA margin remained resilient at 46.2 per cent; nevertheless, we expect margin expansion, resulting from performance growth and efficiency gains.

Supporting this resilient performance was our well instituted contingency plan, which ensured that we remained largely immune to economic disruptions such as: production, supply and distribution shocks resulting from the lock down; the observed shift by investors to alternative investment asset classes; and the low rainfall recorded during the year. More importantly, our product offerings played a vital role, with more customers being increasingly able to appreciate and differentiate how tailored our products are towards meeting their cement requirements, especially in terms of quality and product support, among other features. This showcases the thought and dedication that is deeply engraved into our product design processes, with the customer’s need at the centre of everything we do,” Yusuf concluded.

Elsewhere, BUA Cement during the year y applied to the Nigerian Investment Promotion Commission (NIPC) for a pioneer status for its Production Line 2 in Kalambaina, Sokoto State and an extension for its existing pioneer status on the Okpella Production Line 1 located in Edo State. The pioneer statuses were approved on 26 February 2020 covering a three-year and a two-year period respectively. As a result, no current income tax has been accrued on the pioneer profits in the year and consequently, the N171.3 million (2019: N11.5 million) arising from minimum tax computations is included in the charge for the year on the statement of financial position but above the line in the statement of profit or loss and other comprehensive income for the year.

Meanwhile, the cement manufacturer has proposed N2:067k in dividends to shareholders which will be payment 24 hours after its annual general meeting (AGM) on July 22, 2021.