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BUA Cement Grows Profit After Tax by 26.2% in Q1 2020

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BUA Hq - Investors King
  • BUA Cement Manufacturer Reports N19.8 billion in Q1 2020

BUA Cement Plc, one of Nigeria’s leading cement companies, on Monday reported a 25.1 percent increase in revenue for the first quarter (Q1) ended March 31, 2020.

The cement manufacturer grew revenue from N43 billion reported in the first quarter of 2019 to N54 billion in Q1 2020. The company’s profit before tax expanded by 15.7 percent from N17.4 billion filed in the same quarter of 2019 to N20.1 billion.

This positive performance translated to a 26.1 percent increase in Profit After Tax (PAT). PAT rose from N15.7 billion in Q1 2019 to N19.8 billion in Q1 2020.

According to the unaudited financial results released on the Nigerian Stock Exchange, earnings per share rose from 46 kobo in Q1 2019 to 58 in Q1 2020.

Commenting on the strong results, Yusuf Binji, the Managing Director/CEO of BUA Cement Plc, said positive performance amid the COVID-19 pandemic was a testimony to the company’s resilience. The performance was as a result of an increase in production capacity to 8 million metric tonnes in Q1 2020, up from the 5 million metric tonnes produced in 2019, he stated.

Binji said: “The turn of the year witnessed the achievement of yet another milestone, with the completion of listing requirements of the Nigerian Stock Exchange (NSE), emerging the third-most capitalised company on the exchange; with a market capitalisation of N1.2 trillion ($3.3 billion) and the de-listing of the shares of CCNN Plc. Subsequently, BUA Cement was included as a constituent of the MSCI frontier market index in February.

“Undoubtedly, the outbreak of the COVID-19 pandemic will have broader ramifications to the world and indeed the world economy, even as governments institute measures to curtail further spread of the virus. Nationally, Nigeria has not been immune to the wave of the virus; with the government instituting safety measures whilst building capacity, in preparedness for possible high number of cases.

“In response to the global pandemic, we implemented our “COVID business continuity program”, built into our corporate governance framework. This minimises disruptions along the value chain; prioritises the safety of workers and customers; and assesses probable scenarios a prolonged lockdown would have on the business.

“Clearly, our strong-showing epitomises the effect of further growth in output but most importantly, a growing appreciation of the value and service offering we continue to afford customers in the market place: with sales revenue increasing by 25.1% (y/y) to N54 billion. We continue to anticipate changes to customer and market behaviour, aimed at further strengthening our value model, even as we continue our push into ‘new markets’.

“As the COVID-19 virus makes landfall, we believe the current measures in place, should help minimise plausible downside risks; nevertheless, poised to take advantage of an upturn in market activities,”Binji added.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Ecobank Reports $401 Million Before Tax in Nine Months to September 2022

Revenue grew by 7% from $1.26 billion in recorded the same period of 2021 to $1.35 billion in the period under review.

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Ecobank Group on Thursday reported a 7% increase in revenue for the nine months ended September 2022, the leading financial institution announced in its audited financial statement.

Revenue grew by 7% from $1.26 billion in recorded the same period of 2021 to $1.35 billion in the period under review.

The bank’s operating profit expanded by 12% to $593 million, up from $528 million filed in the corresponding period of 2021, Investors King reports.

Profit before tax rose to $401 million, a 14% increase from $352 million achieved in 2021. Profit paid to shareholders grew by 7% from $182 million to $196 million.

Gross loans and advances to customers increased 5% from $9.469 billion to $9.917 billion. Similarly, deposits from customers increased by declined by 2% to

Commenting on the bank’s performance, Ade Ayeyemi, CEO, Ecobank Group, said: “We continued to deliver on our strategic priorities and are on track to meet full-year targets despite the complex operating environment. Group-wide return on tangible equity reached a record 21%, and profit before tax increased by 14%, or 48% at constant currency (i.e., excluding currency movements).

“These results reflect the resilience, strong brand and diversification of our pan-African franchise. We saw decent client activity in consumer and wholesale payments, trade finance and foreign currency markets. Additionally,
despite inflationary pressures, we maintained a tight lid on costs, thereby improving our cost-to-income ratio to 56.3% from 58.3% in the previous year.

“The dampened economic outlook necessitated maintaining a sound balance sheet with adequate levels of liquidity and capital. As a result, our total capital adequacy ratio at 14.4% is well above our internal and minimum regulatory limits. Also, we hold sufficient gross impairment reserves that fully cover our non-performing loans. Moreover, we have fully repaid the five-year $400 million convertible debt we issued in September and October of 2017.

“Ecobankers have worked extremely hard to serve our customers’ financial needs, and I am proud of them. As always, we will passionately work towards realising our vision and remaining the bank that Africa and friends of Africa trust.”

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Finance

POS Operators Kicked Against CBN Withdrawal Policy

Nigeria does not have the infrastructure to run a cashless society given the size of cash transactions done daily.

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POS Business in Nigeria

Point of Sale (POS) operators in Nigeria under the umbrella of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) have kicked against the new CBN policy which pegs withdrawal on POS to N20,000 daily. 

Investors King earlier reported that the Central Bank of Nigeria (CBN) plans to limit daily withdrawals for both POS and ATMs to N20,000 daily and N100,000 per week.

The policy which was announced in a circular sent to commercial banks yesterday also restricted cash withdrawals from over-the-counter, Automated Teller Machines (ATMs) to N100,000 and N500,000 per week for individuals and corporate organisations, respectively.

Similarly, the memo directed commercial banks to load only N200 and lower denominations into their ATMs

While commenting on the new policy, AMMBAN President, Olojo Victor stated that the new policy is capable of sending members of the association out of business. 

“They want to send us out of business. We are against this. It is counter-productive. It does not represent what the CBN initially stood for in terms of financial inclusion. This is not driving us forward” Olojo lamented. 

He wondered how an average Nigerian will be able to cope with the new policy, stating that not many Nigerians can transact without the use of cash. 

“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitised.

“There is no alternative and you are taking out cash. You are running a cash-dominant economy as we speak.

“Cash still remains king whether we like it or not. Go to the average market we still have more cash transactions than PoS and suddenly you want to seal cash without bringing alternatives and education and sensitising Nigerians on how the alternatives work.

“This will not fly. It is not suitable. It is a good idea but not at the right time,” he concluded. 

Meanwhile, the president of the Bank Customers Association of Nigeria, BCAN, Dr. Uju Ogubunka, commended the CBN on the policy.

He, however, noted that the policy would be difficult to implement owing to some issues such as broadband connection and sensitisation among others. 

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Finance

Nigeria’s External Debt Rose From $18.3bn in 2010 to $103bn in 2022; Says World Bank

Nigeria spent $9.6 billion on debt servicing in 12 years

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The World Bank stated yesterday that Nigeria’s external debt increased from $18.3 billion in 2010 to $103 billion in 2022. The bank added that the country spent $9.6 billion on debt servicing in 12 years. 

According to the “International Debt Report” released by the bank, Nigeria’s foreign debts rose astronomically by 305 per cent during the 12 years.

The report added that external debt stood at $76.21 billion in 2021 but rose quickly to $103 billion by the first half of 2022 (H2 2022).

Furthermore, cumulative annual interest payments on external debts rose sharply by 2,819 per cent to $1.73 billion in 2021 from $59.3 million in 2010.  

Investors King understands that the implementation of Nigeria’s budget heavily relies on external borrowings.  

An example is the construction of railway tracks which are heavily funded by the Chinese loan while the country’s 2023 budget proposal also has a deficit of about N10 billion which will be significantly sourced from international creditors.

Experts have warned that Nigeria’s rising debt could hamper the nation’s overall development, especially if the debts are not tied to projects with economic value.

Meanwhile, the report added further that principal repayment on the external debt gulped $30.66 billion during the 12 years period with annual principal repayment rising by 469 percent to $6.77 million in 2021 from $1.189 million in 2010. 

In the executive summary, the report noted that Nigeria and other developing countries are at risk of serious debt-related issues. The report cautioned that rising interest rates coupled with the recent sluggish economic movement may force a number of developing countries into a debt crisis. 

Speaking on the report, World Bank Country Director for Nigeria, Shubham Chaudhuri stated that Nigeria’s economy does not reflect the huge level of debt stock, adding that multilateral institution is worried that the cost of servicing debt could exceed the nation’s revenue.  

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