BUA Cement Reports 44% Decline in Profit Due to Foreign Exchange Losses
BUA Cement Plc has experienced a significant decline in profit before tax by 44% in the 2023 financial year, attributing the downturn to substantial foreign exchange losses.
In a challenging financial year, BUA Cement Plc disclosed a sharp decline in its profit before tax, amounting to N67.23 billion in 2023, a 44% reduction from N120.15 billion in the previous year. This decrease is largely due to a foreign exchange loss of N69.96 billion in 2023, a significant increase from N5.5 billion in 2022. Despite these challenges, the company's board of directors has recommended a dividend payout of N2.00 per share.
Although BUA Cement saw a 27.4% increase in revenue to N459.99 billion in 2023, this growth was overshadowed by increased production costs and operating expenses, highlighting the difficult business environment the company faced. The revenue boost was primarily driven by the sale of bagged cement, which rose to N458.05 billion from N359.08 billion in 2022.
The company, which is Nigeria’s second-largest cement producer and holds a dominant position in the North-West, South-South, and South-East regions, reported that the devaluation of the Naira and ongoing inflation had led to rising price pressures and higher production costs. Operating expenses and finance costs also saw significant increases, further impacting the company's profitability.
Despite the downturn, BUA Cement remains committed to expanding its capacity and maintaining its strategic position in the market. Plans are underway to increase its current 11 million metric tonnes per annum (mmtpa) capacity to 17 mmtpa through the commissioning of two new lines.
