This report provides a detailed overview of BUA Cement’s performance during the first half of 2023 (H1:2023).

BUA Cement Plc. recently released its H1:2023 financial results, depicting a 17.24% YoY growth in revenue to NGN221.07bn. On the other hand, production cost of sales (adjusted for depreciation) rose by 17.42% YoY to NGN105.36bn while total operating costs (ex-dep) surged 46.26% YoY to NGN16.86bn. Furthermore, Net finance costs spiked 269.57% YoY to NGN10.52bn following the devaluation of Naira amid elevated interest rate environment in the period. Consequently, Profit Before Tax (PBT) and Profit After Tax (PAT) rose marginally by 2.75% YoY and 3.67% YoY to NGN76.43bn and NGN63.62bn respectively. Overall, net profit margin deteriorated to 28.78% YoY in H1:2023 (vs. 32.54% YoY in H1:2022).

We believe BUA Cement is poised for growth in its revenue and would feed into its bottom-line performance barring any significant devaluation later in the year. Hence, we retain our 2023FY (Full Year) target price of NGN110.81.

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