Forex: BUA Cement Profits Fall By 31% In 2023

Forex: BUA Cement Profits Fall By 31% In 2023
Forex: BUA Cement Profits Fall By 31% In 2023

We Will Maintain N3500 Cement Price Starting January, Says BUA

A front-runner in the Nigerian cement production sector, BUA Cement Plc, has disclosed its financial performance for the year ended December 2023, revealing a profit after tax of N69.45 billion.

This figure indicates a notable 31.2% decline from the N101.01 billion profit recorded in the previous year, 2022.

A significant factor contributing to this downturn is a substantial foreign exchange loss of N69.95 billion experienced in 2023, a steep increase from the N5.50 billion loss reported in 2022.

Like many manufacturing entities in Nigeria, BUA Cement faced challenges due to the depreciating value of the naira, which escalated the costs tied to imported materials and equipment essential for its operations.

The company attributed the foreign exchange loss primarily to exchange losses arising from foreign currency borrowings, which were eligible to be capitalized as part of the borrowing costs for ongoing capital projects.

This financial maneuver reflects the impact of the volatile foreign exchange market on the company’s financial health.

Further details provided by BUA Cement highlighted its foreign loan profile, estimated at $291.1 million, acquired through a 9-year term loan agreement with the International Finance Corporation (IFC) and other financial institutions including the African Finance Corporation, African Development Bank, and Deutsch Investitions, signed on April 27, 2023.

The loan agreement features a moratorium on principal repayments until 2025, with interest payments due semi-annually at a variable rate of 6-months term SOFR+5.5%. The loan is set to mature in December 2032.

Despite the challenges faced and the decline in profit, BUA Cement’s share price remained resilient, closing flat at N150 per share.

This stability in share price amidst profit decline illustrates investor confidence in the long-term prospects of BUA Cement, even as it navigates the immediate hurdles posed by foreign exchange losses.

The post Forex: BUA Cement Profits Fall By 31% In 2023 appeared first on Naija News.

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