BUA Cement Plc saw its profit after tax decline by 31.2 per cent in 2023 due to foreign exchange losses, triggered by the devaluation of the Naira by the Central Bank of Nigeria (CBN), amid a 27.4 per cent rise in revenue.
The company’s chairman, Mr AbdulSamad Rabiu, disclosed this on Thursday in Abuja at its 8th Annual General Meeting (AGM).
He informed shareholders that the cement maker witnessed an increase in net revenue of N460 billion within the period from N361 billion in 2022.
Last year, Nigeria carried out currency devaluations to prop up the Naira and this affected the operations of many companies.
“Profit after tax declined by 31.2 per cent to N70 billion from N101 billion recorded in the corresponding period in 2022.
“This was impacted by foreign exchange losses, which arose from the devaluation and the continued depreciation of the Naira,” he said.
The BUA board chairman explained that despite the reduction in the company’s bottom line, it is committed to shareholder value, announcing a dividend of N2 per share for the year ended December 31, 2023.
Mr Rabiu said that the operating environment within the period was challenging as global growth declined to 3.2 per cent in 2023 from 3.5 per cent recorded in 2022.
“Conversely, global inflation peaked at 6.8 per cent in 2023. Across Sub-Saharan Africa, economic growth declined to 3.3 per cent relative to the 4.0 per cent recorded in 2022, driven majorly by the global slowdown, weather shocks and supply-side issues,” he said.
He said that the company would continue to implement and pursue its strategic goals of expansion and increasing market share.
He said that it would also explore solutions that will enable it to sustain value creation for its shareholders and other stakeholders.
According to Mr Rabiu, the company also improved its capacity utilisation to 61.2 per cent in 2023 from 59.8 per cent in 2022, due to an increase in cement volumes dispatched, adding that the increase in volumes dispatched also increased market share.
“Furthermore, Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) rose to N169 billion from N155 billion recorded in the prior year,” he said.
On his part, Mr Yusuf Binji, the Managing Director of the company, said that the major challenges faced during the year arose from the currency redesign policy of the Central Bank of Nigeria (CBN).
Mr Binji said that the 2023 general elections and foreign exchange volatilities also created major challenges.
“Like every manufacturing business, some of our inputs are dollar-denominated, and with the devaluation and continued depreciation of the Naira, we recorded rising energy and other raw materials’ costs.
“Also, the depreciation of the Naira led to the revaluation of existing liabilities on the balance sheet, which resulted in an exchange loss of N70 billion,” he said.
