March 3, 2025/CSL Research

Financial Highlights:

• Revenue +90.5% y/y to N876.47BN
• Cost of Sales (ex-depreciation) +114.7% y/y to N551.15BN
• OPEX (ex-depreciation) +54.8% y/y to N54.47BN
• EBITDA +79.5% y/y to N179.81BN
• Operating Profit +93.2% y/y to N144.30BN
• Profit before Tax +48.2% y/y to N99.63BN

Stock Rating: SELL Target Price: N77.52/s

In its recently released FY 2024 results, BUA Cement reported a 90.5% y/y increase in Revenue to N876.47bn from N460.00bn in FY 2023. On a quarterly basis, Revenue also grew by 33.5%, reaching N293.07bn in Q4 2024 compared to N219.46bn in Q3 2024.

While no information has been provided on the Revenue breakdown, we attribute the company’s top-line growth to increases in both price and volume.

In FY 2024, the Cost of Sales (adjusted for depreciation) increased by 114.7% y/y, reaching N551.15bn, up from N256.73bn in FY 2023. This surge was primarily driven by significant growth in operations and maintenance service charges (+146.28% y/y), energy costs (+129.16% y/y), and lubricants (+103.64% y/y), resulting from the heightened inflationary pressures and continued currency devaluation. Despite these cost increases, Gross Profit grew by 60.0% y/y, reaching N325.32bn in FY 2024.

However, the Gross Margin contracted sharply by 707 basis points, falling to 37.1% from 44.2% in FY 2023.

Source: Company Data, CSL Research

Operating Expenses (adjusted for depreciation) rose by 54.80% y/y to N54.47bn in FY 2024, compared to N35.19bn in FY 2023. This increase was driven by higher Administrative Expenses (adjusted for depreciation), which surged 81.9% y/y to N21.11bn, and a 41.5% y/y rise in Selling & Distribution Expenses (adjusted for depreciation) to N33.36bn.

In FY 2024, Other Income—which includes insurance claims, government grants, and miscellaneous earnings—declined sharply by 48.4% y/y, falling to N1.06bn, down from N2.06bn in FY 2023.The company also faced significant foreign exchange (FX) losses, which surged to N92.11bn, up from N69.96bn in FY 2023, primarily due to the continued devaluation of the Naira.

Despite these challenges, EBITDA rose by 79.5% y/y, reaching N179.81bn in FY 2024, compared to N100.19bn in FY 2023. However, the EBITDA margin declined by 127 basis points, settling at 20.5%, down from 21.8% in FY 2023.

Meanwhile, Operating Profit nearly doubled, climbing to N144.30bn, up from N74.70bn in FY 2023. This growth came despite a 39.3% y/y increase in Depreciation and Amortization, which rose to N35.51bn.

BUA Cement’s Net Finance Cost surged by 493.2% in FY 2024, rising to N41.85bn from N7.05bn in FY 2023. This increase was driven by a sharp increase in Finance Costs, which rose to N60.04bn from N19.94bn last year amidst a moderate growth in Finance Income, which climbed to N18.19bn from N12.88bn.

Pre-Tax Profit increased by 48.2% y/y, reaching N99.63bn, up from N67.23bn in FY 2023. However, Tax Expense surged to N25.72bn, a sharp contrast to the Tax Credit of N2.23bn recorded in the previous year. As a result, Net Income saw moderate growth of 6.4% y/y, rising to N73.91bn, up from N69.46bn in FY 2023. Earnings per Share (EPS) increased by 6.4% y/y, reaching N2.18/s, compared to N2.05/s in the prior year.

We have a target price of N77.52/s for BUA Cement with a SELL recommendation. Current Price; N93.00/s

To read full report, click on the link below​​

​BUA Cement FY 2024 Quick Take .pdf​​​​​​​​​​​​​

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