Despite COVID-19 headwinds, BUA Cement posts 48% surge in Q3 net profit

BUA Cement, Nigeria’s second largest cement producer by volume, printed a 48 percent increase in net profit in three months — July to September — at N18.74 billion from N12.64 billion in the same period in 2019.

This is coming amid the weak construction activities caused by prolonged lockdown period imposed by the government to curb the spread of the coronavirus pandemic in the country.

During the three months, revenue spiked 39.7 percent at N55.28 billion from N39.57 billion in the same period in 2019. Cost of sales surged 46.16 percent at N30.30 billion from N20.73 billion.

For the nine months, revenue increased 20.9 percent at N156.55 billion from N129.42 billion in 2019. Cost of sales spiked at N84.82 billion from N66.30 billion — this is as a result of mounting energy cost that jumped 23 percent to N34.39 billion. Despite the surging cost of sales, gross profit stood at N71.72 billion — up from N63.12 billion.

However, BUA said it is making efforts at cost optimisation, one of which is the reconfiguration of the Sokoto plant to run on gas.

Selling and distribution costs surged N9.67 billion from N8.34 billion — indicative of management’s effort in doubling down on promotions and marketing to boost sales.

Marketing expenses increased 10 percent, while administrative expenses also jumped 15.24 percent at N7.03 billion from N6.10 billion in 2019.

Profit for the period stood at N53.56 billion up from N43.25 billion.

In early 2020, BUA Cement was listed at a market cap of N1.2 trillion on the Nigerian Stock Exchange after a merger of BUA Group’s two cement subsidiaries — CCNN and Obu Cement.