BUA Cement Loses Over 20% Market Value in Two Days Amid Earnings Slump

BUA Cement Plc has seen a significant drop in its market value, losing over 20% in just two days following the release of its disappointing first-half earnings report.

The company’s share price fell sharply, reflecting investor concerns over the decline in profitability amidst challenging economic conditions.

The stock, which had been trading steadily at N143.20 per share, tumbled to N114.30 by the close of trading on Monday.

This represents a more than 38% drop from its 52-week high of N185 per share earlier in the year.

The market capitalization of the cement giant has now dipped below N4 trillion, settling at N3.87 trillion.

The steep decline was triggered by BUA Cement’s unimpressive financial performance for the first half of 2024.

The company reported a 46.2% year-on-year decrease in net income, which dropped to N34.25 billion from N63.62 billion in the same period last year.

Earnings per share also fell by 46.3%, sliding from N1.88 in H1 2023 to N1.01 in H1 2024.

Investors reacted swiftly to the earnings report, with a sell-off in the equities market leading to a sharp decline in BUA Cement’s stock price.

The sell-side pressure was exacerbated by broader macroeconomic challenges, including naira fluctuations, high inflation, and rising interest rates, all of which have adversely impacted the company’s cost profile.

Despite the decline in share price, trading volume remained relatively light, suggesting that the sell-off may have been driven by a minority of investors, with the majority of shares still held by the company’s chairman.

However, the market’s reaction underscores the growing concern among investors about the company’s ability to navigate the current economic environment.

The significant drop in BUA Cement’s market value highlights the volatility in the Nigerian equities market, particularly for companies facing economic headwinds.