Construction business favours BUA cement as Q1 profit hits 4-year high
BUA Cement Plc, Nigeria’s second Largest Cement producer, has released its Q1 2021 Unaudited results reporting a profit of N33.14 billion, representing 48.18percent increase Year on Year, according to BusinessDay’s findings.
Further analysis of the result shows that the company’s product categories improved, driving revenue growth in the period. Revenue growth for the period was at 58.5percent year on year, recorded as N96.99 billion.
The cement company saw its revenue surge 58.5 percent to hit N96.99 billion, coming from N61.19 billion recorded in the first three months of 2021.
The company’s first-quarter 2022 revenue, the highest since 2019 with a huge increase of 124.9 percent from N43.13 billion recorded in 2019.
Oluwasesan Adeyeye, an analyst at CSL Stockbrokers Limited, attributed the growth in revenue to the increase in volumes and pricing during the first quarter of 2022.
Adeyeye said “unlike where Dangote cement and Lafarge struggled to increase volume due to gas constraints, BUACEMENT recorded volume growth of 26.2 percent yeay on year to 1.73 million tonnes in Q1 2022.”
“Apart from that, it also achieved price growth of 25.6 percent year on year, which together cascaded into a 58.5 percent growth in revenue to N96.99 billion in Q1 2022,” he added.
Adeyeye further explained that gains associated with the new 3 million tonnes (line 4) Kalambaina plant proved supportive in driving growth.
BUA cement recorded a profit growth of 48.14 percent to N33.14 billion in March 2022 from N22.37 billion in March 2021.
Adeyeye explained that the growth in profit was as a result of the increase in revenue and decline in net finance cost.
Finance costs recorded by the cement producer totalled N30.31 billion, a 96.5 percent decline from N878.73 in the period under review.
The cement company’s cost of sales rose by 52.18 percent amounting to N48.79 billion during the quarter, as against N32.06 recorded in the same period of 2021.
Adeyeye explained that the increase in pricing was in response to neutralising cost presssures being faced by cement players and not leaving BUA cement behind amid the strong demand for cement.
Analysis carried out by Businessday to gauge the degree to which a company activity makes a profit, shows a profit margin of 34.17 percent.
The cement producer incurred selling and distribution costs amounting to N3.24 billion, a whopping 107.7 percent increase from N1.56 billion in the period under review.
Administrative expenses incurred by the company also surged to N2.76 billion in Q1’2022, representing a 41.54 percent increase from N1.95 billion in Q1’2021.
BUA Cement’s total assets grew by 9.76 percent from N714.01 billion in the first three months of 2021 to N783.73 billion in the first three months of 2022.
Its total shareholders’ equity amounted to N431.26 billion during the period, an 8.27 percent increase from N3.32 billion recorded in the same period last year.
The cement company’s cash and cash equivalent declined by 22.70 percent during the quarter to N84.74 billion from N110.01 billion recorded in the first quarter of the preceding year.
Net cash generated from operating activities amounted to N36.42 billion, a 54.19 percent decrease from N79.5 billion in March 2021.
Similarly, the cement company reported a 95.92 percent decline in net cash from financing activities to N3.31 billion in March 2022, from N81.15 billion in March 2021.
Net cash used in investing activities appreciated by 42 percent to N17.33 billion from N12.17 billion in March 2021.
BUA cement recorded earnings per share of 96 kobo, a 48.48 percent increase from 66 kobo it recorded in the previous year.