From Uche Usim, Abuja
Bua Cement Plc on Thursday announced an increase in revenues by 19.3 percent to N209.4 billion in 2020 compared to N175,5 billion in 2019.
Presenting the statement of accounts to the company’s shareholders at the 5th Annual General Meeting (AGM) of the firm, the Executive Chairman, Abdul-Samad Rabiu said that the company experienced growths in all performance indexes notwithstanding the destabilising effects of the COVID-19 pandemic.
While revenue grew by 19.3 percent in the year under review, he said volumes rose to 5.1 million tons, and Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 18.0 % to N96.8 billion from N81.9 billion in 2019.
“With EBITDA margin being resilient at 46.2 %, we also recorded 19.4% growth in Profit After Tax (PAT) to N72.3 billion and 19.6 % 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 informed BUA’s shareholders.
He also announced plans to commission additional production lines, to raise the firms’ current cement capacity of 11 metric tons per annum in 2021 to 20 metric tons per annum by 2022.
Addition of new lines to the existing ones, he believes, is a strategy to tame insatiable and sustained demand for cement, which leads to exorbitant prices to the detriment of builders and potential homeowners.
Rabiu informed BUA shareholders that efforts were on for the commissioning of Kalambaina line-3, which, according to him, will add 3mmtpa to the existing 8mmtpa in 2021.
The BUA Chairman advocated for more players in the cement industry, noting that the quantity of cement produced by BUA, Dangote and Nafaj could not meet the demand considering the high population of the country of about 220 million people.
He explained that currently, the three cement companies in the country produce about 30 million tonnes per annum hence the need to have more players in order to bring down the prices.
Rabiu noted that though more players would mean more competition for him, it was in the best interest of the country.
He however urged the Federal Government to do everything possible to bring more investors into the sector with a view to meet the cement demand of Nigerians.
“The high price of cement is of great concern to me. The price is actually high. We are 210 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 for the rising demand of cement in the country.
“Egypt produces 85 tons of cement per annum and the demand of cement in that country is just 50 million tonnes per annum and that is why the country sells one of the cheapest prices of cement on the continent” he said.
In December, BUA cement announced the signing of an agreement with CBMI, part of the Sinoma Group of China to raise its existing output capacity from a potential 11mmtpa to 20 mmtpa with the construction of 3 additional lines, totaling 9mmtpa.
To enhance its financial flexibility, BUA issued its maiden corporate bond which was oversubscribed leading to raising of N115 billion . The proceeds from the bond were deployed to finance expansion of the 3mmmtpa, line-3 plant at Kalambaina in Sokoto State.