BUA Cement bolsters revenue amidst tough operating environment
BUA Cement, Nigeria’s second largest cement company, has reported a 47.5% increase in revenues from ₦119.01 billion to ₦175.52 billion, its audited financial statement for 2019 has shown.
In the report submitted to the Nigerian Stock Exchange, the company’s also reported a 69.1% increase in pretax profit for the year.
In absolute term, the cement company’s profit before tax jerked up from ₦39.17 billion in 2018 to ₦66.24 billion in 2019.
MarketForces recalled that BUA Cement emerged from a business combination between CCNN Plc and BUA Cement Manufacturing Company’s Obu Cement Company.
The Cement company has a market capitalisation of ₦1.18 trillion or $3.3 billion in the local bourse.
Speaking on the result, the company’s Managing Director, Yusuf Binji said: “Through the adoption of a focused and disciplined approach, we continue to record strong revenue growth.
“Even, as we derive revenue and cost synergies from the merger across pricing, scale and operational efficiencies; all supported by a sustainable business model and a value-oriented strategy, which have translated to growing market acceptance and is reflective in our margins”.
BUA’s MD stated this despite the complexities and uncertainty that trailed the economic environment in 2019.
“We delivered on important strategic priorities, such as: the commissioning of our 3mmtpa Line-2 at our Obu Plant in March, 2019.
“The merger completion between CCNN Plc and Obu Cement Company Limited and commenced the listing process of BUA Cement Plc, the resultant entity of the merger on the floor of the NSE, with the eventual delisting of CCNN Plc”, he added.
Binji explained that going forward, BUA Cement focus is to further harness the full benefits of the merger while making further in-roads to “new markets” both locally and outside Nigeria.
“We understand that the local and indeed the global economy would experience more uncertainties, yet we expect continued strong showing across the business, spurred-on by continued recovery across the global economy”, the BUA boss stated.
In his comments Acting CFO, Chike Ajaero said: “In 2019, we reported a decline in Profit after Tax (PAT) from ₦64.07 billion in 2018 to ₦60.61 billion”.
Ajaero attributed this to income tax credit of ₦26.76 billion in 2018 from reversal of previous tax provision made on Obu Line 1 and deferred tax credit on securing approval for tax exemptions under pioneer status incentive in 2019.
“Net deferred tax charge of ₦5.15 billion was provided for in the current year and actual tax payable of ₦475.29 million.
“Obu Line-1 and Kalambaina Line -2 are both on pioneer status approved in February 2020 for 2-years (extension) and 3-years respectively”, the Acting CFO explained.
He said the computation of Earnings per Share (EPS) for 2018 has been re-stated, to reflect a business combination under common control, as at January 2018”.
“It should be noted that BUA Cement Plc is Nigeria’s second largest cement producer and the largest producer in its North-West, South-South and South-East regions; with a combined installed capacity of 8 mmtpa”, he added.