BUA Cement reviews N99.630 billion pre-tax revenue, up 48.20% in 2024

BUA Cement Plc has reported revenue earlier than tax of N99.630 billion for the monetary yr ended December 31, 2024, representing a 48.20% year-on-year (YoY) improve from 2023.

In accordance with the annual report and monetary statements reviewed by Nairametrics, the corporate’s full-year income surged by 90.54% YoY to N876.470 billion, pushed by robust home gross sales of its bagged cement class.

Key highlights (2024 vs 2023 FY)  

• Income: N876.470 billion +90.54% YoY
• Price of gross sales: N576.213 billion +108.74% YoY
• Gross revenue: N300.257 billion +63.22% YoY
• Promoting & distribution bills: N42.859 +47.44% YoY
• Administrative bills: N22.062 billion +79.42% YoY
• Web international alternate loss: N92.105 +31.66%
• Working revenue: N144.295 billion +93.17% YoY
• Finance earnings: N18.191 billion +41.21% YoY
• Finance value: N60.042 billion +201.16% YoY
• Revenue after tax: N73.909 billion +6.41% YoY
• Earnings per share: N2.18 +6.34% YoY
• Money and money equivalents: N84.749 billion -62.35% YoY
• Whole belongings: N1.570 trillion +29.17% YoY
• Shareholders’ funds: N388.548 billion +0.86% YoY

Commentary

Whereas income progress was spectacular, rising prices and monetary bills considerably impacted profitability.

• The 108.74% improve in the price of gross sales (N576.213 billion) outpaced income progress, lowering the gross revenue margin by 14% to 34.2%. This improve was primarily pushed by increased vitality consumption in addition to operation and upkeep service fees.
• Cement manufacturing is energy-intensive, and the point out of upper vitality consumption and operation/upkeep prices means that rising gasoline, electrical energy, and plant maintenance bills performed a significant position on this margin compression.

Nevertheless, the rise in working revenue to N144 billion and working revenue margin regardless of heavy value pressures signifies that BUA Cement’s core enterprise stays robust.

A 1.38% improve in working margin is a constructive signal however contemplating the magnitude of foreign exchange losses and price escalation, the margin enchancment seems modest. It means that whereas the corporate is managing prices successfully, profitability may have been a lot stronger if value pressures had been decrease.

The corporate ought to discover effectivity measures to comprise prices, together with higher logistics, optimized procurement, and improved FX danger administration. These efforts will assist enhance bottom-line progress.

• Revenue after tax solely grew 6.41% to N73.909 billion, contracting the online revenue margin to eight%. This displays elevated tax burdens and price pressures.
• Earnings per share (EPS) elevated by simply 6.34%, suggesting that regardless of robust income progress and better working revenue, bottom-line enlargement remained modest.

Liquidity and monetary place 

• Money and money equivalents declined by 62.35% to N84.749 billion, pushed by a discount in short-term deposits and money in bank. This decline impacted present belongings, weakening liquidity, as mirrored within the drop within the present ratio from 1.06 to 0.65.
• In the meantime, complete belongings grew by 29.17% to N1.57 trillion, however shareholders’ funds noticed solely a marginal 0.86% improve. In consequence, the corporate’s leverage rose from 3.16 to 4.04, indicating better reliance on debt to finance asset progress

Key takeaways: 

• Income progress was robust, however rising prices, FX losses, and tax burdens constrained bottom-line progress.
• Vitality prices are a significant concern – Increased gasoline, electrical energy, and upkeep bills contributed to gross margin compression.
• Working revenue resilient however not optimum: Working revenue and margin improved regardless of value pressures, however profitability may have been stronger with higher value controls.
• Liquidity challenges: Money reserves fell sharply, weakening liquidity, as seen within the decline within the present ratio.
• Elevated leverage: The corporate relied extra on debt for asset progress, elevating monetary danger and curiosity obligations.