In its recently released unaudited Q1 2024 results, BUA Cement reported a 51.5% y/y Revenue growth to N161.13bn in Q1 2024 from N106.35bn in the prior period (Q1 2023). Similarly, on a q/q basis, Revenue was up by 29.8% from N124.14bn in Q4 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 by 116.8% y/y to N110.97bn in Q1 2024 from N51.19bn in Q1 2023. We observed that most of the cost increases came from operation and maintenance service charges (281.53% y/y), Materials (156.19% y/y), and energy cost (+147.11% y/y). We believe that elevated inflationary pressures and the steep devaluation of the currency have raised the cost of the company significantly. Given the rise in Cost of Sales, Gross profit declined by 9.0% y/y to N50.17bn in Q1 2024 while Gross margin contracted by 2,073ppts y/y to 31.10% in Q1 2024 from the N51.90% recorded in Q1 2023.
