Thursday, 28th March 2024
To guardian.ng
Search
Breaking News:

Shareholders attribute increase in cement price to naira devaluation

By Anthony Otaru, Abuja
09 July 2021   |   3:08 am
Shareholders have blamed the continued increase in the price of cement on currency devaluation, calling on the government to create a better operating environment and incentives to increase investments in the industry.

BUA Cement Plc

As BUA revenue hit N209.4bn

Shareholders have blamed the continued increase in the price of cement on currency devaluation, calling on the government to create a better operating environment and incentives to increase investments in the industry.

This, they said, was necessary to bridge the gap in the housing market. They stated this during BUA Cement Plc’s yearly general meeting, held in Abuja, yesterday.

This came as the company announced a leap in its revenues for the 2020 financial year by 19.3 per cent, rising from N175.5 billion realised in 2019 to N209.4 billion.

According to the shareholders who spoke to The Guardian during the meeting, the increase in cement price to between N4, 000 and N4,500 per bag is unacceptable and needs to be reviewed. They, however, blamed the rise on the dwindling value of naira.

In his contribution, Chairman, BUA Cement, Abdul-Samad Rabiu, said only an aggressive increase in the volume of investment in the sector would crash the price. He said there was more room for other players

Rabiu stressed: ‘’Cement needs to come down from the current N4,000 to N5,500 per bag to, say, N2,000 to N3,000. The major problem is that the major cement manufacturers – BUA, Lafarge and Dangote – currently produce about 30 million metric tonnes yearly as against the demand of over 50 million metric tonnes.”

He charged the government to encourage more investors to come into the sector by creating an enabling environment for the industry to strive.

Meanwhile, the company announced plans to commission additional production lines, to raise the firm’s 11 metric tonnes yearly capacity to 20 metric tonnes next year.

The addition of lines, the board said, would help to reduce the wide supply-demand gap. Rabiu informed BUA shareholders that efforts were on to commission Kalambaina Line Three, which would add three million metric tonnes per year to its existing eight million.

Presenting the financial statement, Rabiu said the company experienced growth across all performance indices notwithstanding the COVID-19 pandemic.

“With Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin being resilient at 46.2 per cent, we also recorded 19.4 per cent growth in the profit after tax (PAT) to N72.3 billion and 19.6 per cent rise in earnings per share (ESP) to N2.14 from N1.79 recorded in 2019.”

“In view of our sustained performance, the board has recommended for shareholders’ approval a dividend of N2.067 per ordinary share”, he declared.

0 Comments