BUA Cement’s Bank Borrowings More Than Triple In 2023

The company said in a statement,“The FX loss capitalised relates to the portion of the exchange losses arising from foreign currency borrowings eligible to be capitalised as part of the borrowing costs for capital projects under construction.” Despite a decline in after-tax profit to N69.45 billion from N101.01 billion in 2022, there was a notable revenue growth of 27.4 percent, reaching N460 billion from N360.9 billion in the previous year, owing to an increase in price.

A Lagos-based research analyst told BusinessDay,“The borrowing spike is largely attributed to the company’s expansion efforts, with most of the foreign exchange losses stemming from these borrowings.” Further analysis of the statement shows that of the total borrowings, current bank loans stood at N122.68 billion, up from N80.69 billion, while non-current loans grew to N295.46 billion from N44.74 billion.

Net cash from operating activities saw a marginal increase to N147.60 billion from N147.46 billion, while net cash from investing activities reported a negative of N104.12 billion from a negative of N101.43 billion.

Administrative expenses rose to N12.29 billion from N10.5 billion, while distribution and selling expenses increased to N29.06 billion from N19.68 billion.

The determined effective interest rate of the specific borrowing cost is IFC Loan – 12.06 percent.” The company’s total equity decreased to N385.22 billion from N411.11 billion.

However, with the naira devaluation and ongoing depreciation, coupled with rising inflation, the company faced increasing price pressures, leading to a 39.5 percent increase in production costs to N276 billion compared to N197.9 billion in 2022..

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