BUA cement declares N209.4bn profit, advises on price cut

BUA Cement Plc has declared an increase in revenue by 19.3 per cent to N209.4 billion profit for the year 2020 and advised on how to check the escalating increase in the price of the product.
The Chairman, Board of Directors of BUA Cement Plc, Alhaji Abdul-Samad Rabiu disclosed this at the 5th Annual General Meeting of the company in Abuja on Thursday.
He said the profit for 2020 increased from N175.5 billion that was realised in 2019.
“While revenue grew by 19.3 per cent in the year under review, the volumes rose to 5.1 million tonnes, EBITDA increased by 18.0 per cent to N96.8 billion from N81.9 billion in 2019.
“With EBITDA margin being resilient at 46.2 per cent, we also recorded 19.4 per cent growth in Profit After Tax (PAT) to N72.3 billion and 19.6 per cent rise in Earnings Per Share (ESP) to N2.14 from N1.79 as at 2019”.
“In view of our sustained performance, the board has recommended for your approval a dividend of N2.067 per ordinary share,” he announced.
Meanwhile, Rabiu also disclosed plans to inaugurate additional production lines to raise the firms’ current cement capacity of 11 metric tonnes per annum in 2021 to 20 metric tonnes per annum by 2022.
He said in addition to new lines to the existing ones, BUA board believed it was a strategy to taming insatiable and sustained demand for cement, which had led to exorbitant prices to detriment of builders and potential homeowners.
Rabiu told shareholders that efforts were on for the inauguration of Kalambaina line-three.
According to him, the new line will add three million tonnes per annum to the existing eight million tonnes in 2021.
He said that prices will crash if Nigeria has more producers.
Nigeria currently has three major cement producers – Dangote Cement, Bua and Lafarge. Their combined 30 million tonnes per annum production does not meet rising local demand.
Rabiu said at the Annual General Meeting of his company that with increased production by additional companies, the prices of cement would tumble.
He said though increased number of cement producers would mean more competition for him, the interests of the country and that of its people were paramount.
He urged the Federal Government to licence more cement manufacturers with a view to meeting local demand.
“The high price of cement is of a great concern for me; the price is actually high. We are 210 million or 220 million people, 30 million tonnes of cement per annum is actually low for us.
“No one can really control the price because it depends on demand and supply. We are trying hard to ensure the price is not as high as it is now.
“Nigeria is growing with a huge economy; we need more plants on stream to cater to the rising demand of cement in the country.
“Egypt produces 85 tonnes of cement per annum and the demand of cement in that country is just 50 million tonnes per annum and that is why prices of cement in Egypt are the lowest on the African continent,’’ Rabiu said.
He said that BUA’s third cement plant in Sokoto would be inaugurated by the end of 2021 while other plants were under construction.