Profit slumped by 33% in the first quarter as FX tsunami hit BUA Cement Plc. In its unaudited financial statement, the cement company’s net profit settled at N17.97 billion, which was 33% below N26.80 billion recorded in the corresponding period of 2023.
The key deal breaker for the company was N10 billion in losses due to exchange rate fluctuations, according to a details review of its financial scorecard for the first three months of operations in 2024.
In the first quarter of the year, BUA Cement Plc’s profit before tax went down by 40% to N21.29 billion compared to N35.46 billion recorded in the same quarter of 2023.
The Q1 results showed that BUA Cement’s gross profit went down by 11% year on year to N44.94 billion for the period under review, as against N50.37 billion posted in the corresponding period of 2023.
Its operating profit printed 13% lower in the first quarter of 2024, details from the company financial statement revealed. BUA posted N33.48 billion as its Q1 operating profit as against N38.39 billion recorded in the same period of 2023.
Details from Q1 unaudited results showed that BUA Cement reported a 51.5% year-on-year revenue growth to N161.13 billion due to price increase and volume growth as against N106.35 billion the company posted in the comparable period in 2023.
Similarly, its costs of sales jumped as a result of higher input price and inflationary impacts of cost profile. In its review, CSL Stockbrokers said the company cost of sales as adjusted for depreciation rose by 116.8% year on year to N110.97 billion in Q1 2024 from N51.19 billion in Q1 2023.
According to analysts, most of the cost increases came from operation and maintenance service charges which surged by 281.53% year on year, including a 156.19% increase in materials cost and a more than 147% spike in energy cost.
BUA Cement net finance costs declined by 58.3% to N1.82 billion in Q1 2024 from N4.36 billion in Q1 2023. The decline reflects a significant year-on-year rise in finance income to N3.06 billion in Q1 2024 from N60.69 million recorded in Q1 2023.
But finance cost rose to N4.88 billion from the N4.12 billion recorded in Q1 2023. The company reported FX losses of N10.10 billion in Q1 2024 because of the devaluation of the Naira. Consequently, pretax profit was down by 40% year on year to N21.29 billion in Q1 2024 from N35.46 billion in Q1 2023.
BUA Cement Plc’s net profit for the period declined by 33.0% to N17.97 billion from N26.80 billion in Q1 2023. This has negative impacts on its earnings per share which declined 32.9% year on year to N0.53/s for Q1 2024 from N0.79/s in Q1 2023.
The cement company’s total asset for the period under review rose by 2.46 per cent to N1.25 trillion, from N1.22 trillion posted in the same quarter of the previous year.
Its total liabilities advanced by 1.47 per cent as at the end of the first quarter of 2024, to close at N842.70 billion, as against N830.46 billion recorded in the comparable period in 2023.
The managing director further said that BUA cement’s free float value as of March 31, 2024, stood at N111.12 billion, compared to N69.08 billion recorded in the same period of the previous year.
This complies with the Exchange’s free float requirements for companies listed on the Main Board. Naira Suffers Big, CBN Goes Ballistic Against FX Whales
