Despite the increase in price by cement manufacturers early in the first quarter of the year, BUA Cement Plc has recorded 49.1 per cent fall in profit after tax to N17.96bn from N26.8bn it gained in the same period in 2023.
The country’s second-largest cement maker’s unaudited financial statement for the first quarter of 2024, analysed by NewsNGR reveals that the company saw a surge in sales revenue from N106.4bn in 2023 to N161.2bn by the end of the first quarter of this year.
The surge in its revenues may be linked to high cement prices which rose to nearly 12,000 per 50kg bag between January to March.
But the gains were eroded by the high cost of sales valued at N116.2bn out of which BUA Cement spent a staggering N56.57bn on energy cost.
The amount spent by BUA on energy in the first three months of this year reflects 147.1 per cent of the N22.89bn that the company spent on energy in the same period of last year.
When cement makers hiked the prices of their products around February this year, they cited high energy costs and the country’s foreign exchange woes which led to the depreciation of the naira to N1,900.
Due to naira depreciation, BUA lost N10.1bn in foreign exchange woes, a factor that was crucial in the depreciation of the manufacturer’s first quarter, 2024 profit after tax.
In the last quarter of 2023, BUA Cement announced that beginning from October 2, 2023, ex-factory price of its product would sell for N3,500 per bag, down from N5,500 per bag but the manufacturer reneged on the promise over the rising cost of production.
Despite the headwinds, BUA marginally reduced its borrowings to N412.8bn from the N418bn which it was last year.