News about BUA cement AGM and news from the CEO
- Posted on August 30, 2024
- Editors Pick
- By admin
Event:
- Annual General Meeting (AGM): The 8th AGM of BUA Cement was held on August 29, 2024, in Abuja.
Key Individuals:
- AbdulSamad Rabiu: Chairman of BUA Cement.
- Yusuf Binji: Managing Director, BUA Cement Plc.
- Hauwa Satomi: Company Secretary, BUA Cement Plc.
Main Issues:
- Cement Pricing Plan:
- In 2023, BUA Cement intended to sell cement at N3,500 per bag.
- This plan was frustrated by cement dealers who manipulated the market to their advantage, selling the cement at significantly higher prices (up to N7,000 - N8,000 per bag).
Challenges Faced:
- Market Manipulation: Dealers were profiting heavily by selling the cement at prices much higher than intended by BUA Cement.
- Inability to Control Pricing: BUA Cement found it challenging to regulate these dealers, leading to the discontinuation of the N3,500 per bag pricing policy.
- Economic Pressures:
- The devaluation of the Naira and the removal of the fuel subsidy made it increasingly difficult for BUA Cement to sustain the low pricing.
- As the exchange rate moved from about N600 to N1,800 per USD, maintaining the price policy became even more unfeasible.
Current Pricing Situation:
- Efforts to Control Price Escalation: Despite the economic challenges, BUA Cement worked to ensure that the price of cement did not escalate at the same rate as the Naira’s devaluation.
- Comparison with Last Year: Rabiu mentioned that cement prices, despite the economic pressures, had only increased by about 50%, from N4,000 at the beginning of 2023 to N6,000 currently, which he argued is less than expected given the Naira’s depreciation.
Cost Pressures:
- Energy Costs: A significant portion of the company’s costs, particularly energy, is denominated in USD, making operations more expensive as the Naira depreciates.
- Gas Pricing: Gas, used to power the plants, is also priced in USD, adding to the cost pressures.
Financial Performance:
- Revenue Growth: BUA Cement saw a 27.4% increase in revenue, reaching N460 billion in 2024, up from N361 billion in 2023.
- Production Cost Increase: Due to the Naira’s devaluation and inflation, production costs increased by 39.5% to N276 billion.
- Foreign Exchange Loss: The company recorded a net foreign exchange loss of N70 billion, largely due to the devaluation of the Naira and related finance costs.
- Net Profit: Despite the challenges, BUA Cement reported a net profit of N69.5 billion and declared a dividend of N2 per share.
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