BUA Cement Plc released its 2023 full year audited financials, reporting an EPS of N2.05 against N2.98 jn 2022.
The significant decline in the company’s EPS was due to rising COGS ex-depreciation and OPEX ex-depreciation amid further drain from the huge foreign exchange losses to N69.96 billion incurred for the year.
BUA Cement board has proposed a final dividend of N2.00 per shares. Revenue grew by 27.4% in 2023 full year against 40.3% in 2022, boosted by sales from its Nigerian market, even as export earnings contracted.
Gross margin declined by 575bps to 44.2% in 2023 full year, undermined by the heightened cost of sales ex-depreciation growth.
Notable increases on BUA Cement cost line stemmed from energy consumption highlighting the impact of rising energy costs and operation and maintenance service charges during the period.
Consequently, the group’s EBITDA margin contracted by 508bps to 37.0%, further exacerbated by a growth in OPEX ex-depreciation, following a 59.7% increase in selling and distribution ex-depreciation expenses.
Further down, net finance costs surged in 2023 full year, driven by a marked increase in foreign exchange losses to N69.96 billion and interest expenses to N19.94 billion amid a higher interest income balance to N12.88 billion.
Sequentially, profit before tax fell by 44.0% to N67.23 billion in 2023 full year. After accounting for a tax credit of N2.23 billion against tax expense of N19.14 billion in 2022 full year, profit after tax settled lower at 31.2% to N69.45 billion.
Market watchers, noted that BUA Comment
was able to sustain revenue expansion despite the dampened industry-wide demand in the year as the adjustment of its ex-factory price in third quarter of 2023 supplemented topline performance.
However, sticky production and operating cost pressures continued to weigh on the group’s margins amid the naira devaluation in 2023 full year further diminishing earnings growth.
Going into 2024, they anticipate the group will maintain its topline growth as it ramps up production volume from its newly commissioned 3.00mmtpa lines at the Sokoto and Obu Plants.
Furthermore, they envisage the new 70MW gas power plant in Sokoto and planned activation of the 70MW gas power plant at Obu in Q1-24, will likely reduce energy costs in the near term and provide some needed respite for profit margins.