BUA Cement Plc released its financial results for Q1 2024, revealing a pre-tax profit decrease of 39.97% to N21.286 billion compared to Q1 2023. This follows a 44.05% year-on-year profit decline in 2023, amid tough economic conditions characterized by high inflation, interest rates, and exchange rate fluctuations.
Key highlights of Q1 2024 versus Q1 2023 show revenue increasing by 51.51%, but cost of sales surged by 107.56%, resulting in a gross profit decline of 10.78%. Operating profit also decreased by 12.79%, with a record foreign exchange loss of N10.055 billion impacting profitability.
The substantial increase in material and energy costs, constituting 89.77% of total cost of sales, significantly affected gross and operating profits, despite a decrease in operating expenses. The decline in profits led to a 29% reduction in dividend per share for the 2023 financial year.
Investors may interpret these results negatively, raising concerns about the company’s financial health and sustainability. This perception could impact investor confidence and potentially lead to a decrease in the stock price.