BUA Cement PLC, one of the cement producing giants of Nigeria, owned by Africa’s fifth richest man, Abdulsamad Rabiu, released its Q4 Unaudited Financial Statement, which revealed a 22.87% growth in its revenue from N209.4 billion recorded in 2020’s full-year report compared to N257.3 billion recorded in 2021’s full-year report.
2021 was a year to remember in the Nigerian economy, as double-digit inflation, as well as supply chain disruptions witnessed all over the world, have all led to an increase in the price of raw materials. Also, adding to the inflationary pressure is the forex crisis the country faced and is currently facing. These have ultimately led to an increase in the price of cement in 2021.
The company’s only income source, its cement sales, accounted for all the revenue generated during the period. The increase could be attributable to a number of factors which includes an increase in sales volume for the year, an increase in the price of its cement products or a combination of both.
Key highlights of the report
- Diving deeper into the results, it revealed a significant increase in cost of sale by 20.42% from approximately N114 billion to N137.2 billion.
- Material cost grew by 90.53% from N21.3 billion to N40.5 billion while energy cost also grew by 28.68% from N43 billion to N55.4 billion during the period.
- Double-digit inflation alongside disruptions in supply chains as well as the forex crisis witnessed in 2021, may have been the contributing factors that led to the increase in both the material and energy costs.
- The company’s profit after tax grew by 26.81% from N72.3 billion to N91.7 billion during the period. Although there were notable increases in selling and distribution expenses, administrative expenses and income tax, the firm still delivered an increase in its Earnings Per Share (EPS) by 26.64% despite the unfavourable economic conditions.
- The company recently commissioned a 3 million metric ton Sokoto line 4 cement factory on the 27th of January 2021, significantly expanding its cement production. This should help boost the firms’ earnings greatly in the coming years, especially now that it is making effort to tighten its credit policy. This is evident because the company’s trades and other receivables declined by 52.91% during the period.
BUA Cement is currently trading at N69.95 per share with a market capitalization of N2.37 trillion as of Friday, January 28, 2021. Year-to-date (YtD), its share price has increased marginally by 4.33% from N67.05 at the beginning of the year.
