BUA Cement incurred N92bn FX loss in 2024 – Abdulsamad Rabiu
Orisemeke Benjamin
The Chairman of BUA Cement, Abdul Samad Rabiu on Monday revealed that the company suffered a foreign Exchange loss of N92 billion in 2024.
The Bua Cement Chairman, who made this known at the company’s Annual General Meeting (AGM) in Abuja, explained that the loss was due to the unification of the Naira.
Rabiu, however said that the situation has improved considerably in this year.
According to the BUA Cement helmsman, in 2023, the company incurred FX loss of N63 billion.
Now, on the effect of foreign exchange on our operations and expansion plans. You know, at the time before the unification of the exchange rate, it was about ₦600 per dollar.
“He said, “So, what was happening then? If you were expanding or even setting up a new business, most of your equipment had to be imported. Typically, you’d have a plant project that might cost around $500 million. Companies setting up such plants usually require either a letter of credit or some form of guarantee to secure the imports.
“What happened was, we opened letters of credit. For each company, depending on the project size, we’d make provisions—sometimes borrowing—to get the necessary letters of credit. But if you couldn’t access forex at the time, you opened the letter of credit, you were exposed to forex risks. And because most of these projects take two to three years, that exposure could become significant.
“So, for our expansion projects, we committed dollars at $400 or $500 to the naira. But by the time the project was completed, the exchange rate had changed drastically. That’s why the process became more expensive—because you have to pay the differential when the exchange rate changes.”
The BUA Cement Chairman noted that in spite of the setback, the company delivered strong financial results in the year under review, with growth in sales, increasing earnings, and a strengthened balance sheet and liquidity position.
“Revenue rose by 90.5% to N8765 billion (2023: N460 billion). While EBITDA grew by 43.8% to N268,6 billion (2023: N1868 billion). Net profit before tax rose by 48.2% to 499.63 billion (2023: N67.2 billion), despite further currency depreciation during the period, which resulted in increased foreign exchange losses of N93.9 billion (2023: N69.9 billion).
“BUA Cement’s return on average capital employed (ROACE) in 2024 increased to 15% compared to 10% in 2023. Earnings per share increased to N2.18 in 2024 from N2.05 in 2023, an increase of 6.3%,” he further said.
With a proposed dividend of N2.05 per share, representing a 94% payout ratio, BUA Cement continues to demonstrate its strong commitment to shareholder returns.
On the 2024 financials, the company’s Managing Director /Chief Executive Officer, Yusuf Binji noted that despite headwinds, the company delivered as its revenue nearly doubled, soaring to N876.5 billion, a remarkable 90.5%increase from N460 billion in 2023.
This topline growth was complemented by strong profitability, with profit before tax rising by 48.2% to N99.6 billion (2023: N67.2 billion) and profit after tax increasing by 6.3% to N73.9 billion, up from N69.5 billion in the previous year.
In 2024, we delivered exceptional financial performance, underscoring our resilience, strategic agility, and unwavering commitment to growth in a dynamic economic environment. These results reflect not only the strength of our operational execution but also the strategies in navigating the complex the effectiveness of our forward-looking,” the MD said.
