Revenues Growth Soars as BUA Cement’s Cement Sales Hit N335.86 Billion in 9M’2023


**BUA Cement Reports Soaring Other Income, Driven by Insurance Claims**

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BUA Cement has experienced a remarkable 311% increase in its other income during the first nine months of 2023, primarily fueled by insurance claims. The cement manufacturer’s other income surged from N271.86 million in the corresponding period of 2022 to N1.12 billion.

Insurance claims accounted for a substantial 80%, contributing N893.66 million, while sundry income made up the remaining 20%, totaling N223.07 million in BUA Cement’s overall other income.

In terms of revenue, BUA Cement witnessed a substantial growth in cement sales revenue, reaching N335.86 billion in 9M’2023 compared to N262.6 billion in the same period of 2022. This 27.92% growth was attributed to both increased prices and sales volumes. Average cement prices rose by 21.4%, reaching N68,540/ton, while sales volumes saw a 6.52% increase, closing at 4.90 million MT.

Despite the robust revenue growth, CSL Research analysts foresee a 25% year-on-year increase in Nigerian operations’ revenue to N451.89 billion for the entire fiscal year 2023. However, they caution that costs associated with production capacity expansion may impact profitability negatively in the short to medium term.

Cost of sales rose to N186.44 billion in 9M’2023 from N142.83 billion in the same period of 2022. Marketing expenses and other overheads increased to N119.36 million from N62.33 million, repair and maintenance costs grew from N6.92 billion to N9.37 billion, and energy costs surged from N65.01 billion to N82.34 billion.

Despite increased expenses, BUA Cement’s profit after tax showed a positive trend, rising to N76.07 billion in 9M’2023 from N74.01 billion in the corresponding period of 2022. Profit before tax, however, experienced a slight decline from N88.81 billion to N85.75 billion.

CSL Research analysts attribute the industry’s volume growth challenges to the constrained purchasing power of private players and low government CAPEX expenditure in the current macroeconomic environment. To stimulate volume growth, BUA Cement reduced its ex-factory price in Q3.

Notably, BUA Cement’s net interest expense increased to N7 billion in 9M’2023 from N4.46 billion in the same period of 2022, and the net exchange loss stood at N26.93 billion in 9M’2023, up from N5.26 billion in 2022.

The company’s ongoing expansion drive, including the construction of lines 3 and 5 at the Obu and Sokoto plants, aims to increase volume capacity to 17 million metric tonnes from the existing 11 million metric tonnes. Analysts believe the reduction in ex-factory prices was strategic to boost demand and enhance the company’s market share.

Godwin Okafor
Godwin Okafor
Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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