Goddy Egene writes that with a growth of 24 per cent in profit after tax in the nine months ended September 30, 2020, shareholders of BAU Cement Plc are to receive good returns at the end of the financial year When investors stake their money in shares at the stock market, they expect to get returns in form of capital appreciation or dividend payment. Given the unstable economic environment, the performance of many companies has become unpredictable. Consequently, returns on investments in terms of dividend, have equally been irregular. However, there are some companies that have ensured that shareholders get regular dividend payment and BUA Cement Plc is among those companies.
The company has raised the hopes of shareholders that at the end of the financial year, December 31, they would be sure of getting handsome dividend. This assurance came from the impressive nine months results recorded by the cement manufacturing company.
BUA Cement, which is one of Africa's largest cement producers reported a revenue of N156.55 billion in 2020, showing an increase of 21 per cent from N129.429 billion in the corresponding period of 2019.
Gross profit rose from N63.123 billion to N71.729 billion. Selling and distribution expenses rose from N8.341 billion to N9.679 billion, while administrative expenses rose from N6.103 billion to N7.034 billion.
The company was able to reduce its net financing cost by 23 per cent from N3.719 billion to N2.874 billion. This enhanced the profitability as profit before tax (PBT) grew by 19 per cent to N59.484 billion from N50.186 billion. Profit after tax (PAT) grew faster by 24 per cent from N43.253 billion to N53.567 billion.
Speaking on the result, alongside other activities undertaken during the review period, Managing Director/CEO of BUA Cement Plc, Yusuf Binji, acknowledged the positive impact of a less than anticipated COVID-19 pandemic shock on the populace and economy and the expected resilience of the private sector and a short rainy season.
"This has been a very heartwarming and resilient performance, underpinned by the continued quality that characterizes the BUA Cement product offerings as we see more end-users able to differentiate the attendant benefits of using our products. Expectedly, we witnessed a resurging demand from a resilient private sector - within and outside Nigeria, as the lockdown was eased, coupled with a short rainy season: despite flooding in some parts of Nigeria and Niger," he said.
According to him, in view of their ongoing expansion activities alongside working capital requirements, they have concluded on plans to approach the bond market.
"This decision to approach the market form part of the considerations put before shareholders at our last Annual General Meeting (AGM) in October, thus, enabling us take advantage of the low interest rate environment, in addition to the discontinuance of funding sources through related-parties transactions," he said.
Binji disclosed that despite 2020 being a challenging year, they have been buoyed by a growing customer base aided by their deliberate decision to focus on quality.
He said that 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.
"In a bid to further drive cost efficiencies and sustainability, we entered into strategic alliances for the supply of Liquefied Natural Gas (LNG) at the Kalambaina, Sokoto State and the management of our mining operations. Given these deliberate and strategic choices amongst other cost management efforts, we continue to combine development and innovation into our offerings and activities," Binji said.
According to him, in spite of 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."
"Understandably, the year ahead is fraught with challenges, as global and domestic economies, individuals and businesses make adjustment to disruptions from the pandemic, yet, we a re-excited because of the continued resilience from the private sector, particularly with the increased appreciation of our product offerings; upgrades and development of the infrastructure stock by governments; the possible commencement of the African Continental Free Trade Agreement (ACFTA);the commissioning of our third line at Kalambaina, alongside the first phase of the energy diversification project, which would see the introduction of Liquefied Natural Gas to our operations," he said.
BUA Cement Plc, is Nigeria's second largest cement company and the largest producer in its North-West, South-South and South-East regions; with a combined installed capacity of 8million metric tonnes per annum. It is planning to increase existing capacity to 11million mtpa, through the inauguration of a new three million mtpa plant by the first half of 2021 in Sokoto State, Nigeria.
While striving to record improved results and deliver good returns to shareholders, BUA Cement Plc has also be making sure that it gives back to the communities where it operates.
According to the MD/CEO during the period, BUA Cement fulfilled its commitment to build sustainable communities by successfully relocating community members from Gidam Bailu and Gidam Datti to Girabshi, a close-by settlement purchased and developed by BUA Cement in Sokoto State.
" Subsequently, we have been involved in the electrification of the settlement, provision of clean water and the construction and equipping of a school, a healthcare centre etc. Bags of cement alongside cash donations were made to each of the 387 households, as we pursue an inclusive, safe, resilient and sustainable environment. Apart from this, electricity transformers were donated to the Okpella community in Edo State, including patrol vehicles to reinforce existing security measures," Binji said.
He explained that generally, in executing its corporate social responsibility (CSR) strategy, the MD/CEO said BUA Group implements initiatives in line with the Global Sustainable Development Goals (SDG), aimed to drive economic growth and encourage human development capacity.
According to him, over the years, BUA Group has invested millions of dollars (through its respective subsidiaries) in extensive social impact projects towards the development of host communities by investing in healthcare,eduction and water, sanitation and other areas.
Meanwhile, financial analysts said one major move that would boost the performance of BUA Cement going forward, is the appointment of Jacques Piekarski as its new Chief Financial Officer (CFO) and executive director effective October 2, 2020.
Commenting on the appointment, Chairman, BUA Cement Plc, Abdul Samad Rabiu, said: The board is confident that Piekarski broad experience, strong leadership capabilities and understanding of the industry will ensure that BUA Cement is well positioned to take advantage of available opportunities to drive improved operational performance and sustain our profitable growth trajectory."
Also, commenting, Binji said: "We are thrilled to welcome Jacques Piekarski to BUA Cement. He brings a wealth of experience to this role - both in the Nigerian cement industry and the African region as a whole. I am certain his skills and experience will make a significant contribution and continue to drive the company forward."
A seasoned finance professional with over 26 years experience, prior to joining BUA Cement, Piekarski held several C-suite finance roles across Europe and Africa in FMCG, Cement, trading, and mining.
Over the course of his career, he has had significant achievements in setting-up or re-organising finance departments, financing (loans, bond, rights issue, debt restructuring and re-financing), revenue and cost optimization programs, various expansion and projects including ERP implementations, and controlling. He is known as a charismatic, results driven and dynamic leader, with a strong business acumen.
Prior to joining BUA Cement, Jacques was Group CFO for TGI Group Nigeria - one of the largest Food and Agri privately owned conglomerate in the country. He joined this role from Flour Mills of Nigeria where he was also Group CFO. Piekarski has also garnered an extensive knowledge of the cement industry form his time as the CFO for Holcim (today LafargeHolcim) in Egypt with a joint venture with the Orascom Group. In this role, he was actively involved in building-up the finance department, financing the plant expansion and monitoring its budget, implementing Holcim financial standards and a vast cost reduction program. During his tenure, the plant was the second largest single plant in the world with 8mt capacity.
A Swiss and French National, Piekarski was born in Switzerland. He is a graduate from the Business School in Lausanne, Switzerland, and holds an MBA from the Robert Kennedy College, Zurich, Switzerland. Piekarski is the President of the Swiss Nigerian Business Council in Lagos.
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