In its recently released FY 2023 results, BUA Cement reported a 27.4% y/y growth in Revenue to N459.99bn in FY 2023 from N360.99bn in the prior period (FY 2022). Similarly, on a q/q basis, Revenue was up by 8.1% to N124.14bn in Q4 2023 from N114.77bn in Q3 2023. 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.
Cost of Sales (adjusted for depreciation) was up 41.9 y/y to N257.12bn in FY 2023 from N181.16bn in FY 2022. We observed that the steep growth in Cost of Sales was driven by significant increases in operation and maintenance service charges (+88.23% y/y) and energy cost (+35.19% y/y). We believe the elevated inflationary pressures and the persistent devaluation of the currency continue to raise the cost of the company. Gross profit grew by 12.8% y/y to N202.88bn in FY 2023 while Gross margin which was impacted by elevated cost pressures contracted by 5.7ppts y/y to 44.10% in FY 2023
