BUA Sustains Strong Performance As Profit Rises By 54% To N105.6bn

Despite the numerous political and economic headwinds impacts experienced in the year, BUA Foods Plc sustained her leadership position in the Foods with a Profit After Tax (PAT) of N105.6 billion for the nine months period ended in September 2023.The amount represents a growth of 54 per cent against N68.8 reported the same period of last year.The company revenue grew by 81 per cent y-o-y to N524.4 billion at the end of September this year from N289.8 billion reported at the corresponding period of 2022.The growth in revenue according to the company was due to a year-on-year increase of 74.2 per cent in Sugar to N315.2 billion from N180.9 billion reported in 2022, a 126 per cent increase in Flour to N149.9 billion against N66.2 billion in the preceding year and 37 per cent growth in Pasta to N58.3 billion from N42.7 billion in the comparative period of last year.According to the company result, new division Rice business contributed N995 million to the top line during the same period, adding that across the business divisions there was significant growth in volume sold impacting the overall performance as well.The key drivers include slight price adjustments to reflect high input costs, volume growth and gradual commissioning of its expansion projects.The increase in cost of sales added 74.1 per cent to N340.6 billion in the third quarter from 195.6 billion in 2022 and was driven by an increase in raw materials cost and energy cost. The high input cost environment and further devaluation of the Naira against the US Dollar weighed heavily on prices for raw materials. This resulted in higher cost of production. Gross profit increased by 95.1 per cent to N183.8 billion in nine month in year 2023 against N94.2 billion in the same period of last year even as gross profit margin appreciated by 250bps to 35.0 per cent within the reviewed period against 32.5 per cent recorded in the preceding year due to the slight selling price adjustment and new market penetration for sales within the year.

Forex Deals: BUA Sponsoring Lies Against Our Brand – Dangote

The Management of Dangote Industries Limited (DIL) has refuted allegations that it engaged in illegal foreign exchange deals, warning those peddling the allegation of economic sabotage against the company to desist from such underhand practices. It gave the warning following claims in some sponsored reports in the online media, suggesting that the company is being probed for alleged illegal foreign exchange deals and money laundering by the Special Investigator, Jim Obazee who is probing the Central Bank of Nigeria (CBN) under the leadership of the former CBN governor, Mr. Godwin Emefiele. In a statement at the weekend, DIL described the allegation as “spurious and a rehash of a similar report peddled out of malice by a competitor, BUA Group, masquerading as a concerned Nigerian in 2016.” Dangote recalled that the spurious and false story was started in 2016 and published in both BusinessDay and Leadership Newspapers, and accused the authors of the report of rejigging it to make it appear as authentic and a new development. Dangote said: “It is saddening to note that this publication of Monday, March 14, 2016 in BusinessDay and Leadership newspapers where the author had alleged that about “$3billion foreign exchange sourced from the CBN were diverted to other Dangote companies outside Nigeria, a practice that encourages round tripping and effect money laundering since there is no proper documentation”. DIL management explained that the same false report back “in 2016 was now being given a fresh false slant by one Ahmed Fahad purporting it to be a new petition directed to the attention of President Bola Ahmed Tinubu and Mr. Jim Obazee, the Special Investigator probing the CBN, and subsequently different blogs and social media platforms have been carrying variants of this arrant falsehood to the detriment of our corporate reputation.” The statement said “attempt by the authors of this misleading allegation to give it a fresh life in the media is baffling as the two newspapers that were misguided into publishing it as advertorial then (2016) have since publicly apologised to the Management of Dangote Industries Limited in writing as well as retracted the advertorial in its entirety in their respective publications. Indeed, BusinessDay and Leadership Newspapers admitted that the advertorial was sponsored by Messrs. BUA Nigeria Limited.” DIL re-emphasised that foreign exchange for its numerous projects were sourced strictly from Interbank Foreign Exchange market in compliance with the CBN approvals and that “Letters of Credit” were established for the construction of the various operational plants and for the purchase of heavy equipment and spares required for the take-off of the Dangote Cement plants. “The terms and conditions for payments on the transactions were clearly spelt out in the Letters of Credit instruments and in line with the International Chamber of Commerce – Universal Customs & Practice for Documentation Credit – UCP 600. It is also crucial to note that the Letters of Credit in favour of Sinoma International Engineering Co Ltd (a Chinese Government owned company), being the major contractor who accounted for over 75 per cent of these expenditures were paid against the presentation of all relevant shipping documents. There was no single payment that was made through any Dubai company owned by us,” the statement noted. DIL explained its forex dealings thus: “all FX purchased in respect of our African Projects expansion were fully utilised for what they were meant for. The projects for which the FX was utilised are visible for everyone to see. It is on record that some of these projects were commissioned by Nigerian top-ranking government officials and in attendance were Chief Executives of various banks, Captains of Industries and the Presidents of the host countries supported by their Senior Government Officials.” The company further stated that funds invested in its expansion project across African countries are legitimate capital investments in those countries and the repatriation of FX in sum of $576 million so far has helped to boost foreign Exchange earnings in Nigeria and stabilise the FX Market. Besides, DIL emphasised that it had “always funded the construction of her various plants from Interbank FX Market in line with the CBN directives and relevant periodic progress reports were submitted to the banks for onward submission to the Central Bank of Nigeria.”

BUA Slashes Cement Price To N3500 Per Bag

From Monday 2nd October, 2023, Nigerians would buy a bag of BUA Cement for N3,500 from the N5,700 that it was previously sold for.  A statement signed by the management of the company Sunday, the reduction in price is keeping with its promise of bringing down the price of the commodity when it completes its production line.  BUA Chairman Samad Rabiu, at the company’s Annual General Meeting has told journalists that Nigeria would see a reduction in the price of cement by January when its production line is complete.  However, the reduction in price is coming few months earlier that the BUA Cement Chairman said.  “We refer to our previous pronouncements regarding our intent to reduce cement prices upon the completion of our new lines at the end of the year in order to spur development in the building materials and infrastructure sectors. “As per the commitment made to reduce prices and following a periodic review of operations for efficiency, the management of BUA Cement Plc wishes to announce to our esteemed customers, stakeholders, and the public that effective October 2 2023, we have decided to bring the price reduction forward. As a result, BUA Cement would now be sold at an ex-factory price of 3,500 Naira per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants. “Upon completion of the ongoing construction of our new plants, which would increase our production volumes to 17million metric tonnes per annum, BUA Cement PLC, tends to review these prices further in line with our earlier pronouncement by the first quarter of 2024. “All pending, undelivered orders which had been paid for at the old price will be reviewed downwards to N3500/bag in line with the new pricing fro October 2, 2023. Our licensed dealers are also enjoined to ensure that end-use benefit from this reduction in ex-factory prices as we will monitor field sales to ensure compliance,” the statement read. 

BUA to bring down price of cement in January

The Chairman of BUA Cement Plc, Abdul Samad Rabiu has said that the company is going to reduce the price of its product by January next year. Rabiu, said this when he fielded questions from journalists on Thursday in Abuja. He said the decision is part of the company’s efforts to support the government and Nigerians. The Minister of Works, Dave Umahi had recently said the federal government was considering the importation of cement as a way of bring down the price of the product. There has been outcry from Nigeria over the high price of cement in the country. The price of cement is between N4,500 to N4,800 across the country. Explaining, he said the challenge with the exchange rate was part of the reason for the high price of the product in the country at the moment. He said, “I understand that the minister is quite concerned, that the price of cement is high at almost N5,000 per tonne. I appreciate where the government is coming from and the frustration from all the issues in the country. “The price of cement at N5,000 is not high. If we look at the rate of the US dollar today, to import cement will be at N5,000. The cement cost, insurance and freight to any port in Nigeria will be in the region of about $100 a tonne. So, at $100 per tonne, if you take N800 to $1 then it will be N4,000 per bag. Then the port cost, and transportation from the port. “It’s not that the government wants to import cement, but they are frustrated that the price of cement is high. What we told our shareholders is that we will engage with the government to support the government. He further said that with its two production lines coming on stream before the end of the year, the company would be in a better position to execute its plan of supporting the government to bring down the price of cement. “If you have the volume and you reduce your price, and with the huge volumes that we have the price must come down. So, even if others are not ready to support the government, to support the reduction of the price of cement, they will be compelled because if they don’t reduce they will not be able to sell. That is why we are going to wait till the end of the year when these two lines are on stream. I will discuss with the minister and see how we can do that,” he added. Earlier at the AGM, shareholders approved the proposal of the board of directors to pay the sum of N2.80 per share in 2022 compared to the N2.60 per share paid in the previous year of 2021. A look at the audited financial statement revealed that the company’s revenue rose by 40.3 per cent to N361.9 billion in 2022 as against N257.3 billion recorded in 2021. Also, Profit After Tax rose by 12.1 per cent to N101.1 billion compared to N90.1 billion recorded in 2021.