In a year that was particularly challenging for businesses, BUA Cement Plc (BUACEMENT) recorded significant improvement (growth of 13.31%) in sales volume from 4,501 Kilotons in 2019FY to 5,100 Kilotons in 2020FY. This was due to a resilient Q2:2020 (the lockdown period) performance, the relatively short rainy season, improved economic conditions in the second half of the year and an unrelenting drive to penetrate new markets. These tailwinds culminated into a topline growth of 19.33% from NGN175.52bn in 2019FY to NGN209.44bn in 2020FY. In assessing the performance, we cannot deny the impact of the export approval enjoyed by the company during the year. We also recognize the company’s commitment to expanding its Nigerian footprint through its capacity expansion initiatives cutting across geopolitical zones. While additional capacity is expected to suffer some under-utilization in the near term, prospects of the Nigerian cement market as seen in the adoption of cement for road construction, and development of other critical infrastructure gives reason for optimism. For 2021FY, we expect revenue to grow by 17.63% from NGN209.47bn in 2020FY to NGN246.41bn. We anchor our expectations on improvements in macroeconomic conditions and higher export volumes (due to reopened borders and the AfCFTA).
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