Despite the challenges brought by COVID-19 pandemic and other economic headwinds, BUA Cement Plc grew its profit after tax for the half year ended June 30, 2020, by 14 percent.
The spread of the Covid-19 pandemic to Nigeria sent panic among citizens, a development that led to the lock down of economic activities for months. After the partial reopening of the economy, apprehensions over the impact of the lockdown remain very high.
At the stock market, for instance, most investors have been adopting cautious trading, awaiting the results of companies for the half year(H1) ended June 30, 2020, before making major investment decisions.
As expected, companies have been releasing their H1 results with mixed grill. While some have posted positive performances despite the covid-19 challenges, others suffered reduced fortunes due to the pandemic and other economic headwinds.
However, BUA Cement Plc, which is one of Africa's largest cement producers, beat the odds and reported improved revenue and profitability for the H1 2020.
The company reported a revenue of N101.3 billion in 2020, up by 12.7 per cent from N89.9 billion posted in the corresponding period of 2019. Operating profit grew by 7.0 per cent from N38.1 billion to N40.8 billion, while profit before tax (PBT) rose 9.8 per cent to N39.2 billion, from N35.7 billion. Profit after tax (PAT) grew faster by 13.7 per cent, from N30.61 billion in 2019 to N34.8 billion in 2020.
Earnings per share printed at N1.03 in 2020, showing an increase of 14.4 per cent compared with N0.90 recorded in 2019, thereby raising the hopes of higher dividend payout at the end of the full year.
A further breakdown of the results showed that cement volume dispatched rose by 7.9 per cent from 2,282 kt in'2019 to 2,463 kt in '2020, underpinned by the growing market acceptance of the company's COVID-19 business continuity plan.
Also during the review period, the company entered into strategic alliances for the supply of Liquefied Natural Gas (LNG) for the Kalambaina operations and management of its mining operations to boost energy efficiency and reduce energy costs.
Speaking on the results, Managing Director of BUA Cement Plc, Yusuf Binji, said the continued impressive performance in 2020 despite the challenging operating environment occasioned by the covid-19 pandemic, was a pointer to the value and strength of the BUA Cement brand and product offerings as well as a nod to the excellent implementation of the company's Business Continuity Plan which ensured that BUA Cement was able to withstand the impact of the pandemic in the period under review.
He said: "Our resilient performance continues to showcase the value and strength in our product offering alongside our strategic business model. Our revenues increased by 12.7 per cent to N101.3 billion from the corresponding period in 2019 whilst operating profits increased by 7.0 per cent, from N38.1 billion in 2019 to N40.8 billion in 2020. Equally, EBITDA margin improved in this quarter to 48.1 per cent - an improvement from 45.6 per cent in first quarter (Q1), 2020."
Binji explained that in a bid to further drive cost efficiencies and sustainability, they entered into strategic alliances for the supply of Liquefied Natural Gas (LNG) at the Kalambaina, Sokoto State and the management of our mining operations. According to him, given these deliberate and strategic choices amongst other cost management efforts, they continue to combine development and innovation into their offerings and activities.
Speaking on the on impact of the pandemic on the business, MD said: "Despite the prevailing economic conditions, we are quite optimistic about the future because it affords us not only with the opportunity to further evolve our business model but also provides an opportunity for accelerated development. We will continue to push to new markets aided by a focused distribution strategy"
Binji disclosed that BUA Cement has also been actively involved in alleviating the impact of the virus on the most vulnerable in society while also supporting the government's efforts by providing foodstuff, PPEs and medical equipment to host communities amongst others.
"BUA Cement is committed to quality - a differentiating attribute, driven by its people, innovation and technology and positioned to solving Nigeria and Africa's challenges while driving economic growth and development," Binji added.
In an apparent move to expand its operations and boost its performance going forward, BUA Cement, last month announced its plans to set to establish a three million metric tonnes cement plant and 50 megawatts power plant in Guyuk and Lamurde local governments of Adamawa State in the North-Eastern region of Nigeria.
The Chairman of BUA, Abdul Samad Rabiu, disclosed this when he led the BUA Cement management team on a courtesy call to the Adamawa State Governor, Ahmadu Fintiri in Yola.
According to Rabiu, preliminary findings show that the two local governments are reputed to have good quality of limestone deposits, stating that BUA Cement is ready to begin the investment in the state. He added that the BUA will use new technologies to supply power to the proposed cement plant and communities of Guyuk and Lamurde in addition to providing three thousand direct and five thousand indirect jobs.
The chairman stressed that the Guyuk Cement Plant will be the major investment in the North East by BUA and solicited for support of Governor Fintiri to set up the factory.
Rabiu said the company made a decision to source its raw materials locally and it has invested billions of dollars in various sectors across Nigeria and therefore urged the state government to support BUA to actualise the Guyuk Cement project.
Before now, Rabiu has always stressed the company's commitment to the creation of value for the benefit of shareholders and maintaining its focus on outperforming the Nigerian cement industry across key indices through a laser-like commitment to excellent products and service delivery, operational efficiency as well as maintaining leadership position in their home markets.
This commitment, he said, led to the merger of Cement Company of Northern Nigeria (CCNN) and Obu Cement Company to create BUA Cement Plc that is currently the third largest firm on the Nigerian Stock Exchange (NSE) by capitalisation.
Rabiu had said: "The merger with Obu Cement will create an entity with increased production capacity. We are of the opinion that the proposed merger will create a platform where significant synergies can be obtained for the benefit of our shareholders, employees, customers, distributors, suppliers and the broader economy.
He noted that in addition to meeting the demand from customers in their core regions in the country, the enlarged company would be positioned to distribute its products in new geographical markets, creating the potential for additional shareholder value creation.
In terms of operational efficiencies, Rabiu noted that merger would provide opportunities for significant cost savings and improved operational efficiencies by streamlining operations and optimising the use of combined resources.
On economies of scale, Rabiu said: "The merger will provide a platform where the enlarged company benefits from economies of scale in procurement, distribution and manufacturing of the products offered to our customers. We expect the benefits accruing from greater economies of scale to accrue to many stakeholders."
Entrepreneur Unveils Fellowship Program
As a way of giving back to the society and to encourage aspiring and fledgling entrepreneurs, Chidi Nwaogu, Nigerian serial tech entrepreneur and software developer has decided to impact 10,000 professionals through an initiative called "Savvy fellowship."
The initiative is a global fellowship program for those passionate about solving some of Africa's most pressing problems through innovation.
Savvy Fellowship is for those who want to build their own impact-driven business without much knowledge and for those who own an early-stage business with the zeal of growing and scaling their impact into new markets.
This initiative is a 12-week e-learning, assessment, and mentorship program, where individuals learn everything from ideation to venture-scaling with successful fellows at the end of the program receiving a certificate of completion to share with their professional network.
Asking Nwaogu, why he decided to venture into starting a fellowship at this difficult time in the world, he explained that COVID-19 pandemic has rendered many people jobless.
"I have decided to start the Savvy Fellowship with the main aim of equipping passionate individuals with the necessary knowledge and skill they need to start their own impact-driven business and succeed as entrepreneurs.
"It's no news that every day, I love sharing with others what I've learned from my experience as an entrepreneur, and Savvy is just an extension of that personal journey of sharing for me," Nwaogu, co-founder at Savvy, multi-award-winning serial entrepreneur, and author of the 'Dear Entrepreneur' book series said.
He further explained that, Savvy is a 12-week-long virtual fellowship program that runs throughout the year.
Some of the things to learn as Savvy Fellows include fundraising for their business, building the right team to execute their business strategies, building buzz around their product or service, achieving product-market fit, scaling into new markets and verticals, and building customer loyalty and retention adding that Savvy Fellowship will kick off with a rigorous 12-weeks e-learning experience for successful applicants. Savvy Fellows get to learn how to start, build, and scale an impact venture. Using visual presentations, they get to answer all the relevant questions they need to kick start their impact venture, gain early traction, achieve product-market fit, and scale into newer markets.
Additional benefits for the participants will include 'understanding their customer', 'building a product or service that effectively solves their key challenges' and 'effectively positioning their solution in the market.' While Savvy is for every impact entrepreneur, no matter what stage their venture is', Nwaogu explained.
Savvy Fellowship launches on August 4, 2020, with its call for application. There is no cohort, no application deadline, and no ethnic restriction.
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