MTN records largest, commercial paper issuance in Nigeria’s corporate history This is the largest commercial paper issuance recorded in Nigeria’s corporate history. Published 5 mins ago on June 9, 2020By Olumide Adesina MTN, MTN Nigeria Communications Plc. has today, announced to the public, its successful Commercial Paper Issuance (series 1 & 2) under its N100 billion Commercial Paper (“CP”) Issuance Programme. MTN Nigeria Communications Plc. (CP 1) had a tenor of 180 days and 270 days (CP 2) with an effective yield of 4.90% for a N20 billion size (CP1) and 5.95% for an N80 billion size (CP2). The CP 1 & 2 notes will be listed on the FMDQ Exchange. This is the largest commercial paper issuance recorded in Nigeria’s corporate history. What MTN Nigeria plans to use the proceeds for? The proceeds from the MTN Nigeria Communications Commercial paper issuance will be used to support MTN Nigeria’s working capital and general corporate purposes. This issuance under the CP Programme represents MTN Nigeria’s debut in the domestic debt capital market. The commercial paper issuance was c.400% subscribed, with active participation from individuals, institutional investors which included pension fund administrators, asset managers, and other corporate firms and other financial institutions. GTBank 728 x 90 Commenting at the closure of the Book Build Chief Executive Officer, MTN Ferdinand Moolman said; “The N100 billion issued is the largest commercial paper issuance by a Nigerian corporate, it allows us to broaden our sources for funding and combines our established lines of credit with access to capital market funding, which will lower our overall cost of borrowing.” Chapel Hill Denham Advisory Limited acted as the arranger and dealer of this successful Commercial Paper Issuance recorded in Nigeria’s debt market. Related MTN Nigeria Communications Plc announces N100 billion commercial paper issuance May 24, 2020 In "Coronavirus" MTN Nigeria begins N100 billion commercial paper issuance today May 28, 2020 In "Fixed Income" Union Bank issues series 3 & 4 Commercial Paper, to raise N20 billion January 20, 2020 In "Business News" RELATED TOPICS:MTN NIGERIA Olumide AdesinaOlumide Adesina a French-born Nigerian, an Investment Professional at Nairametrics Financial Advocates, owners of Nairametrics.com. Olumide Adesina is a Certified Investment Trader, with more than a decade working expertise trading Financial Instruments, holder of several prestigious Financial Certifications. A member of the Chartered Financial Analyst Society. You can follow Olumide on twitter @tokunboadesina and email via olumide.adesina@nairametrics.com.CLICK TO COMMENT BUSINESS NEWSUAC of Nigeria Plc. Announces Annual General Meeting Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House No. 1-5 Odunlami Street, on Wednesday, 15th July, 2020 Published 6 days ago on June 3, 2020By Olumide Adesina CONSUMERS|UACN: Weak operating performance, UAC of Nigeria Plc. Announces Annual General Meeting UAC of Nigeria Plc., today, notified the public that the next Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House (12th Floor), No. 1-5 Odunlami Street, Lagos, Nigeria on Wednesday, 15th July 2020 at 10.00 o’clock in the forenoon in order to transact the following businesses: Here are the agenda for the meeting scheduled by UAC Of Nigeria Plc. READ ALSO: Fines: NSE makes over N154 million from banks, others To lay before the Members the Report of the Directors, the Consolidated Statement of Financial Position of the Company as at 31st December 2019, together with the Consolidated Statement of Comprehensive Income for the year ended on that date and the Reports of the Auditors and the Audit Committee thereon. To declare a Dividend. To elect & re-elect Directors. To authorize the Directors to fix the remuneration of the Auditors. To elect Members of the Audit Committee. To fix the remuneration of the Directors. To renew the general mandate authorizing the Company to enter into recurrent transactions which are of a trading nature or those necessary for its day to day operations with related parties or companies in accordance with the Rules of the Nigerian Stock Exchange governing transactions with related parties or interested persons. It will be recalled that UAC of Nigeria Plc reported FY 2019 revenue of N79.2 billion?while the reported Pre-tax Profit of N7.5 billion. A loss of N14.6 billion arising from discontinued operations (UPDC) led to a net loss of N9.3 billion in FY 2019. Excluding the loss from discontinued operations, the company made a Net Profit of N5.3 billion (up 26% y/y) in FY 2019. GTBank 728 x 90 CONTINUE READINGCORPORATE PRESS RELEASESO3 Capital donates prepaid cards to Lagos State COVID-19 Response Team O3 Cards align with the NCDC guidelines which emphasize less contact with cash and e-commerce and physical distancing. Published 3 weeks ago on May 20, 2020By NM Partners 03 CAPITAL DONATES PREPAID CARDS TO LAGOS STATE COVID-19 RESPONSE TEAM O3 Capital Nigeria Ltd has donated prepaid cards to Lagos state COVID-19 response team in appreciation of their dedication and sacrifice at the forefront of the COVID -19 Pandemic. These cards would further augment the allowances they received from the Lagos State Government and cushion the socio-economic effect of the pandemic. Since Lagos State became the epicenter of the COVID 19 pandemic in Nigeria, the Lagos state COVID-19 response team has executed the aggressive response plan put together by the Lagos State Government under the leadership of His Excellency, Governor Babajide Sanwo-Olu. The Head of Corporate Communication of the company, Mrs. Temitayo Balogun, said the gesture is part of the company’s corporate social responsibility (CSR) during this pandemic. She said that the response team has shown a level of expertise and patriotism most people do not possess hence the prepaid cards are a symbolic exhibition of O3 Capital expertise in their honor. O3 Cards align with the NCDC guidelines which emphasize less contact with cash and e-commerce and physical distancing. She encourages other members of the private sector to contribute in whatever capacity to this fight against the Covid-19 pandemic as it is our collective effort as a people that would guarantee the eradication of the virus in the State and country as a whole. GTBank 728 x 90 (READ MORE: Recalibrating Job creation within COVID-19 realities ) O3 Capital is the first non-bank credit and prepaid card issuer in Nigeria that offers various consumer loans using the credit card as its delivery channel. The cards, popularly known as O3 Cards, can be used on all ATMs, POS, and internet payment sites in Nigeria. 03 CAPITAL DONATES PREPAID CARDS TO LAGOS STATE COVID-19 RESPONSE TEAM 03 CAPITAL The mission of O3 Capital is to ensure there is an 03 card in every wallet” so Nigerians can access funds 24/7/365 to meet everyday consumption requirements. The O3 Card allows you to purchase all forms of goods and services whenever and wherever you want, without ready cash. app CONTINUE READINGCORPORATE PRESS RELEASESBUA Cement Plc Releases audited Financial Results for 2019; Revenue Increased by 47.5% to N175.52 billion BUA Cement’s Profit before Tax (PBT) for the period rose 69.1% (y/y) from N39.17 billion in 2018 to N66.23 billion. Published 3 weeks ago on May 20, 2020By NM Partners BUA Cement Lagos, Nigeria ~ BUA Cement Plc, Nigeria’s second-largest cement company, has recorded a 47.5% increase in revenues of N175.52 billion in its just-released Full-year results for the 2019 Financial Year on the Nigerian Stock Exchange. The company’s Profits also increased by 69.1% from N39.17 billion in 2018 to N66.24 billion in 2019. BUA Cement Plc in its current form is a business combination between CCNN Plc (Sokoto Cement) and BUA Cement Manufacturing Company’s Obu Cement Company which was completed in January 2020 and is currently listed on the Nigerian Stock Exchange (NSE), with a market capitalisation of N1.18 trillion ($3.3 billion), making it the third most capitalised company on the floor of the Exchange. Speaking on the result, Managing Director of BUA Cement, Yusuf Binji said, “Through the adoption of a focused and disciplined approach, we continue to record strong revenue growth, even as we derive revenue and cost synergies from the merger across: pricing, scale, and operational efficiencies; all supported by a sustainable business model and a value-oriented strategy, which have translated to growing market acceptance and is reflective in our margins. This is Despite the complexities and uncertainty that trailed the economic environment in 2019. We delivered on important strategic priorities, such as: the commissioning of our 3mmtpa Line-2 at our Obu Plant in March 2019; the merger completion between CCNN Plc and Obu Cement Company Limited and commenced the listing process of BUA Cement Plc, the resultant entity of the merger on the floor of the Nigeria Stock Exchange (NSE), with the eventual delisting of CCNN Plc. READ MORE: BUA Cement offers solution to Nigeria’s building collapse problem “Going forward, our focus is to further harness the full benefits of the merger while making further in-roads to “new markets” both locally and outside Nigeria. We understand that the local and indeed the global economy would experience more uncertainties, yet we expect continued strong showing across the business, spurred-on by continued recovery across the global economy”. Obu Cement Plant 1 GTBank 728 x 90 In his comments Acting CFO, Chike Ajaero said, “In 2019 we reported a decline in Profit after Tax (PAT) from N64.07 billion in 2018 to N60.61 billion which was due to income tax credit of N26.76 billion in 2018 from the reversal of previous tax provision made on Obu Line 1 and deferred tax credit on securing approval for tax exemptions under pioneer status incentive in 2019. Net deferred tax charge of N5.15 billion was provided for in the current year and actual tax payable of N475.29 million. Obu Line-1 and Kalambaina Line -2 are both on pioneer status approved in February 2020 for 2-years (extension) and 3-years respectively. The computation of Earnings per Share (EPS) for 2018 has been re-stated, to reflect a business combination under common control, as at January 2018”. READ ALSO: Deal: BUA Group makes major move, acquires P.W Nigeria It should be noted that BUA Cement Plc is Nigeria’s second-largest cement producer and the largest producer in its North-West, South-South and South-East regions; with a combined installed capacity of 8 mmtpa and with plans underway to increase existing capacity to 11 mmtpa, through the commissioning of a new 3 mmtpa plant by the first half of 2021 in Sokoto State, Nigeria. BUA Cement operates strategically from Okpella, Edo State and Kalambaina, Sokoto State and is committed to quality – a differentiating attribute, driven by its people, innovation and technology; and positioned to solving Nigeria and Africa’s challenges while driving economic growth and development. I. Financial Highlights Revenue increases by 47.5% from N119.01 billion in 2018 to N175.52 billion in 2019 EBITDA rises 47.2% from N55.70 billion in 2018 to N81.99 billion in 2019 EBITDA margin flat at 47.0%, arising from entry into ‘new markets’ Operating margin (EBIT) is up 4.71% points from 36.0% in 2018 to 40.7% in 2019 Profit before Tax (PBT), up 69.1% from N39.17 billion in 2018 to N66.24 billion in 2019 Profit after Tax (PAT), down 5.40% from N64.07 billion in 2018 to N60.61 billion in 2019, due to a tax credit of N26.76 billion in 2018 from pioneer status incentive( 3 years) granted on Obu line-1 in 2019, reversing previous tax provision for the years READ MORE: Kano block and concrete makers hail BUA Cement quality II. Operational Highlights Cement volume dispatched was up 53.2% from 2,940 kt in 2018 to 4,501 kt, as at 2019; arising from increased capacity Merger between CCNN Plc and Obu Cement Company Limited, yielding revenue and cost synergies Kalambaina plant, Sokoto State (Line 2) goes online for first full year in 2019; Obu Cement Plant, Edo State (Line 2) commissioned in March 2019 Return on Asset (ROA) up from 16.7% (2018) to 17.7% (2019) Entry into new markets aided by a value-oriented strategy app III. Key Developments The appointment of Alhaji Abdulsamad Rabiu, CON as the Chairman of the Board, effective December 23, 2019 The Board appointed Engr. Yusuf Binji as managing director/chief executive officer on December 23, 2019 Mr. Finn Arnoldsen appointed as a non-executive director, effective April 9, 2019 Alhaji Shehu Abubakar and Senator Khairat Gwadabe appointed as independent non-executive directors, effective December 23, 2019 IV. Strategic Priorities Completion of Kalambaina Line-3 (3mmtpa) by H1, 2021. Project execution on schedule Drive further cost and revenue synergies from merger Build on gains recorded from current footholds in “new markets” V. Financial Review Revenue: Revenue increased by 47.5% (y/y) to N175.52 billion in 2019 (2018; N119.01 billion), underpinned by two (2) drivers namely: The merger led to capacity increase(s), from 2mmtpa in 2018 to 8mmtpa in 2019. Our differentiation strategy has translated to an increased appreciation of the ‘value’ imbued in the product offering. Hence, the growing market acceptance. Consequently, cement sales was up 47.5% to N175.52 billion. Cost of Sales: Cost of sales was up by 57.6% (y/y) to N93.1 billion in 2019, resulting from increased production volumes. Moreover, energy cost rose 75.6% (y/y) from N20.67 billion to N36.29 billion from enhanced capacity, though energy per ton of cement produced increase by 14% (y/y); the result of slight increase in energy cost. Operating expenses: Operating expenses recorded a 20.2% rise from N18.60 billion in 2018 to N22.36 billion in 2019, resulting from the following; Administrative expenses was down 16.0% to N10.52 billion (2018; N12.52 billion) due to a 45.6% decline in management and technical support expenses to N1.90 billion in 2019 (2018; N3.49 billion). Conversely, distribution and selling expenses increased by 94.8% (y/y) to N11.84 billion, supportive of higher sales volume from the route-to-new market strategy. Net finance cost: Net finance cost was up 41.3% to N5.19 billion (2018; N3.67 billion) due to increased working capital requirement, which rose from N3.90 billion in 2018 to N21.36 billion in 2019, necessitated by capacity enhancement. Profit before Tax and Profit after Tax: Profit before Tax (PBT) rose 69.1% (y/y) from N39.17 billion in 2018 to N66.23 billion; Profit after Tax (PAT) was down from N64.10 billion to N60.61 billion in 2019, due to deferred tax credit in 2018. However, approvals for the extension of pioneer status on Obu line-1 and Kalambaina line-2 were granted in February, 2020 for 2-years and 3-years respectively. Cash and cash equivalent: Cash and cash equivalent balances rose from N2.71 billion in 2018 to N15.02 billion in 2019, arising from a 69.16% increase in net cash flow from operations to N26.48 billion (2018; N15.66 billion) along with a net borrowing of N16.8 billion. About BUA Cement Plc BUA Cement Plc (Bloomberg; BUACEMENT:NL) is Nigeria’s second-largest cement producer and the largest producer in its North-West, South-South and South-East regions; with a combined installed capacity of 8 mmtpa and with plans underway to increase existing capacity to 11 mmtpa, through the commissioning of a new 3 mmtpa plant by the first half of 2021 in Sokoto State, Nigeria. BUA Cement operates strategically from Okpella, Edo State and Kalambaina, Sokoto State. BUA Cement Plc is a business combination between CCNN Plc (Sokoto Cement) and BUA Cement Manufacturing Company’s Obu Cement Company. Currently listed on the Nigerian Stock Exchange (NSE), with a market capitalisation of N1.18 trillion ($3.3 billion), making it the third most capitalised company on the floor of the Exchange. BUA Cement is committed to quality – a differentiating attribute, driven by its people, innovation, and technology; and positioned to solving Nigeria and Africa’s challenges while driving economic growth and development. More information can be found here. EDITOR’S NOTE: This is a sponsored content. CONTINUE READINGADVERTISEMENT Wealth.ng ADVERTISEMENT ADVERTISEMENT Patricia ADVERTISEMENT devland ADVERTISEMENT financial calculator LATEST TRENDINGMTN, CORPORATE PRESS RELEASES5 mins agoMTN records largest, commercial paper issuance in Nigeria’s corporate historyKalambaina Cement Line 2, BUA Grou BUACEMENT builds Nigeria’s bourse, Investors gain N44.4 billion , Kalambaina Cement, CCNN MARKETS1 hour agoBUACEMENT builds Nigeria’s bourse, Investors gain N44.4 billionGold, Gold prices tick up as President Trump decides on China today, Gold Prices Surges, Protests Erupts In America, Gold Down Over Increased Investor Confidence in Economic Recovery MARKETS1 hour agoGold down over increased investor confidence in economic recoveryADVERTISEMENT app ADVERTISEMENT Nairametrics ABOUT US TEAM NAIRAMETRICS CONTACT US CAREERS ANDRIOD APP IOS APP DISCLAIMER PRIVACY POLICY Copyright © 2020

MTN records largest, commercial paper issuance in Nigeria’s corporate history

This is the largest commercial paper issuance recorded in Nigeria’s corporate history. 

Published 5 mins ago on June 9, 2020By Olumide Adesina MTN,

MTN Nigeria Communications Plc. has today, announced to the public, its successful Commercial Paper Issuance (series 1 & 2) under its N100 billion Commercial Paper (“CP”) Issuance Programme. 

MTN Nigeria Communications Plc. (CP 1) had a tenor of 180 days and 270 days (CP 2) with an effective yield of 4.90% for a N20 billion size (CP1) and 5.95% for an N80 billion size (CP2). The CP 1 & 2 notes will be listed on the FMDQ Exchange. 

 

This is the largest commercial paper issuance recorded in Nigeria’s corporate history. 

What MTN Nigeria plans to use the proceeds for? The proceeds from the MTN Nigeria Communications Commercial paper issuance will be used to support MTN Nigeria’s working capital and general corporate purposes. This issuance under the CP Programme represents MTN Nigeria’s debut in the domestic debt capital market. 

The commercial paper issuance was c.400% subscribed, with active participation from individuals, institutional investors which included pension fund administrators, asset managers, and other corporate firms and other financial institutions.  

GTBank 728 x 90

Commenting at the closure of the Book Build Chief Executive Officer, MTN Ferdinand Moolman said; 

“The N100 billion issued is the largest commercial paper issuance by a Nigerian corporate, it allows us to broaden our sources for funding and combines our established lines of credit with access to capital market funding, which will lower our overall cost of borrowing.” 

Chapel Hill Denham Advisory Limited acted as the arranger and dealer of this successful Commercial Paper Issuance recorded in Nigeria’s debt market. 

Related

MTN Nigeria Communications Plc announces N100 billion commercial paper issuance

May 24, 2020

In "Coronavirus"

MTN Nigeria begins N100 billion commercial paper issuance today

May 28, 2020

In "Fixed Income"

Union Bank issues series 3 & 4 Commercial Paper, to raise N20 billion 

January 20, 2020

In "Business News"

 

RELATED TOPICS:MTN NIGERIA

Olumide AdesinaOlumide Adesina a French-born Nigerian, an Investment Professional at Nairametrics Financial Advocates, owners of Nairametrics.com. Olumide Adesina is a Certified Investment Trader, with more than a decade working expertise trading Financial Instruments, holder of several prestigious Financial Certifications. A member of the Chartered Financial Analyst Society. You can follow Olumide on twitter @tokunboadesina and email via olumide.adesina@nairametrics.com.CLICK TO COMMENT

BUSINESS NEWSUAC of Nigeria Plc. Announces Annual General Meeting

Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House No. 1-5 Odunlami Street, on Wednesday, 15th July, 2020

Published 6 days ago on June 3, 2020By Olumide Adesina CONSUMERS|UACN: Weak operating performance, UAC of Nigeria Plc. Announces Annual General Meeting

UAC of Nigeria Plc., today, notified the public that the next Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House (12th Floor), No. 1-5 Odunlami Street, Lagos, Nigeria on Wednesday, 15th July 2020 at 10.00 o’clock in the forenoon in order to transact the following businesses:

Here are the agenda for the meeting scheduled by UAC Of Nigeria Plc.

 

READ ALSO: Fines: NSE makes over N154 million from banks, others

To lay before the Members the Report of the Directors, the Consolidated Statement of Financial Position of the Company as at 31st December 2019, together with the Consolidated Statement of Comprehensive Income for the year ended on that date and the Reports of the Auditors and the Audit Committee thereon.

To declare a Dividend.

To elect & re-elect Directors.

To authorize the Directors to fix the remuneration of the Auditors.

To elect Members of the Audit Committee.

To fix the remuneration of the Directors.

To renew the general mandate authorizing the Company to enter into recurrent transactions which are of a trading nature or those necessary for its day to day operations with related parties or companies in accordance with the Rules of the Nigerian Stock Exchange governing transactions with related parties or interested persons.

It will be recalled that UAC of Nigeria Plc reported FY 2019 revenue of N79.2 billion?while the reported Pre-tax Profit of N7.5 billion. A loss of N14.6 billion arising from discontinued operations (UPDC) led to a net loss of N9.3 billion in FY 2019. Excluding the loss from discontinued operations, the company made a Net Profit of N5.3 billion (up 26% y/y) in FY 2019.

 

GTBank 728 x 90

 

 

CONTINUE READINGCORPORATE PRESS RELEASESO3 Capital donates prepaid cards to Lagos State COVID-19 Response Team

O3 Cards align with the NCDC guidelines which emphasize less contact with cash and e-commerce and physical distancing.

Published 3 weeks ago on May 20, 2020By NM Partners 03 CAPITAL DONATES PREPAID CARDS TO LAGOS STATE COVID-19 RESPONSE TEAM

O3 Capital Nigeria Ltd has donated prepaid cards to Lagos state COVID-19 response team in appreciation of their dedication and sacrifice at the forefront of the COVID -19 Pandemic.

These cards would further augment the allowances they received from the Lagos State Government and cushion the socio-economic effect of the pandemic. Since Lagos State became the epicenter of the COVID 19 pandemic in Nigeria, the Lagos state COVID-19 response team has executed the aggressive response plan put together by the Lagos State Government under the leadership of His Excellency, Governor Babajide Sanwo-Olu.

 

The Head of Corporate Communication of the company, Mrs. Temitayo Balogun, said the gesture is part of the company’s corporate social responsibility (CSR) during this pandemic.

She said that the response team has shown a level of expertise and patriotism most people do not possess hence the prepaid cards are a symbolic exhibition of O3 Capital expertise in their honor. O3 Cards align with the NCDC guidelines which emphasize less contact with cash and e-commerce and physical distancing.

She encourages other members of the private sector to contribute in whatever capacity to this fight against the Covid-19 pandemic as it is our collective effort as a people that would guarantee the eradication of the virus in the State and country as a whole.

GTBank 728 x 90

(READ MORE: Recalibrating Job creation within COVID-19 realities )

O3 Capital is the first non-bank credit and prepaid card issuer in Nigeria that offers various consumer loans using the credit card as its delivery channel. The cards, popularly known as O3 Cards, can be used on all ATMs, POS, and internet payment sites in Nigeria.

03 CAPITAL DONATES PREPAID CARDS TO LAGOS STATE COVID-19 RESPONSE TEAM

03 CAPITAL

The mission of O3 Capital is to ensure there is an 03 card in every wallet” so Nigerians can access funds 24/7/365 to meet everyday consumption requirements. The O3 Card allows you to purchase all forms of goods and services whenever and wherever you want, without ready cash.

 

app

 

CONTINUE READINGCORPORATE PRESS RELEASESBUA Cement Plc Releases audited Financial Results for 2019; Revenue Increased by 47.5% to N175.52 billion

BUA Cement’s Profit before Tax (PBT) for the period rose 69.1% (y/y) from N39.17 billion in 2018 to N66.23 billion.

Published 3 weeks ago on May 20, 2020By NM Partners BUA Cement

Lagos, Nigeria ~ BUA Cement Plc, Nigeria’s second-largest cement company, has recorded a 47.5% increase in revenues of N175.52 billion in its just-released Full-year results for the 2019 Financial Year on the Nigerian Stock Exchange. The company’s Profits also increased by 69.1% from N39.17 billion in 2018 to N66.24 billion in 2019. BUA Cement Plc in its current form is a business combination between CCNN Plc (Sokoto Cement) and BUA Cement Manufacturing Company’s Obu Cement Company which was completed in January 2020 and is currently listed on the Nigerian Stock Exchange (NSE), with a market capitalisation of N1.18 trillion ($3.3 billion), making it the third most capitalised company on the floor of the Exchange.

Speaking on the result, Managing Director of BUA Cement, Yusuf Binji said, “Through the adoption of a focused and disciplined approach, we continue to record strong revenue growth, even as we derive revenue and cost synergies from the merger across: pricing, scale, and operational efficiencies; all supported by a sustainable business model and a value-oriented strategy, which have translated to growing market acceptance and is reflective in our margins. This is Despite the complexities and uncertainty that trailed the economic environment in 2019. We delivered on important strategic priorities, such as: the commissioning of our 3mmtpa Line-2 at our Obu Plant in March 2019; the merger completion between CCNN Plc and Obu Cement Company Limited and commenced the listing process of BUA Cement Plc, the resultant entity of the merger on the floor of the Nigeria Stock Exchange (NSE), with the eventual delisting of CCNN Plc.

 

READ MORE: BUA Cement offers solution to Nigeria’s building collapse problem

“Going forward, our focus is to further harness the full benefits of the merger while making further in-roads to “new markets” both locally and outside Nigeria. We understand that the local and indeed the global economy would experience more uncertainties, yet we expect continued strong showing across the business, spurred-on by continued recovery across the global economy”.

Obu Cement Plant 1

GTBank 728 x 90

In his comments Acting CFO, Chike Ajaero said, “In 2019 we reported a decline in Profit after Tax (PAT) from N64.07 billion in 2018 to N60.61 billion which was due to income tax credit of N26.76 billion in 2018 from the reversal of previous tax provision made on Obu Line 1 and deferred tax credit on securing approval for tax exemptions under pioneer status incentive in 2019. Net deferred tax charge of N5.15 billion was provided for in the current year and actual tax payable of N475.29 million. Obu Line-1 and Kalambaina Line -2 are both on pioneer status approved in February 2020 for 2-years (extension) and 3-years respectively. The computation of Earnings per Share (EPS) for 2018 has been re-stated, to reflect a business combination under common control, as at January 2018”.

READ ALSO: Deal: BUA Group makes major move, acquires P.W Nigeria

It should be noted that BUA Cement Plc is Nigeria’s second-largest cement producer and the largest producer in its North-West, South-South and South-East regions; with a combined installed capacity of 8 mmtpa and with plans underway to increase existing capacity to 11 mmtpa, through the commissioning of a new 3 mmtpa plant by the first half of 2021 in Sokoto State, Nigeria. BUA Cement operates strategically from Okpella, Edo State and Kalambaina, Sokoto State and is committed to quality – a differentiating attribute, driven by its people, innovation and technology; and positioned to solving Nigeria and Africa’s challenges while driving economic growth and development.

I. Financial Highlights

Revenue increases by 47.5% from N119.01 billion in 2018 to N175.52 billion in 2019

EBITDA rises 47.2% from N55.70 billion in 2018 to N81.99 billion in 2019

EBITDA margin flat at 47.0%, arising from entry into ‘new markets’

Operating margin (EBIT) is up 4.71% points from 36.0% in 2018 to 40.7% in 2019

Profit before Tax (PBT), up 69.1% from N39.17 billion in 2018 to N66.24 billion in 2019

Profit after Tax (PAT), down 5.40% from N64.07 billion in 2018 to N60.61 billion in 2019, due to a tax credit of N26.76 billion in 2018 from pioneer status incentive( 3 years) granted on Obu line-1 in 2019, reversing previous tax provision for the years

READ MORE: Kano block and concrete makers hail BUA Cement quality

II. Operational Highlights

Cement volume dispatched was up 53.2% from 2,940 kt in 2018 to 4,501 kt, as at 2019; arising from increased capacity

Merger between CCNN Plc and Obu Cement Company Limited, yielding revenue and cost synergies

Kalambaina plant, Sokoto State (Line 2) goes online for first full year in 2019; Obu Cement Plant, Edo State (Line 2) commissioned in March 2019

Return on Asset (ROA) up from 16.7% (2018) to 17.7% (2019)

Entry into new markets aided by a value-oriented strategy

app

III. Key Developments

The appointment of Alhaji Abdulsamad Rabiu, CON as the Chairman of the Board, effective December 23, 2019

The Board appointed Engr. Yusuf Binji as managing director/chief executive officer on December 23, 2019

Mr. Finn Arnoldsen appointed as a non-executive director, effective April 9, 2019

Alhaji Shehu Abubakar and Senator Khairat Gwadabe appointed as independent non-executive directors, effective December 23, 2019

IV. Strategic Priorities

Completion of Kalambaina Line-3 (3mmtpa) by H1, 2021. Project execution on schedule

 Drive further cost and revenue synergies from merger

 Build on gains recorded from current footholds in “new markets”

V. Financial Review

Revenue: Revenue increased by 47.5% (y/y) to N175.52 billion in 2019 (2018; N119.01 billion), underpinned by two (2) drivers namely:

The merger led to capacity increase(s), from 2mmtpa in 2018 to 8mmtpa in 2019.

Our differentiation strategy has translated to an increased appreciation of the ‘value’ imbued in the product offering. Hence, the growing market acceptance. Consequently, cement sales was up 47.5% to N175.52 billion.

Cost of Sales: Cost of sales was up by 57.6% (y/y) to N93.1 billion in 2019, resulting from increased production volumes. Moreover, energy cost rose 75.6% (y/y) from N20.67 billion to N36.29 billion from enhanced capacity, though energy per ton of cement produced increase by 14% (y/y); the result of slight increase in energy cost.

Operating expenses: Operating expenses recorded a 20.2% rise from N18.60 billion in 2018 to N22.36 billion in 2019, resulting from the following;

Administrative expenses was down 16.0% to N10.52 billion (2018; N12.52 billion) due to a 45.6% decline in management and technical support expenses to N1.90 billion in 2019 (2018; N3.49 billion).

Conversely, distribution and selling expenses increased by 94.8% (y/y) to N11.84 billion, supportive of higher sales volume from the route-to-new market strategy.

Net finance cost: Net finance cost was up 41.3% to N5.19 billion (2018; N3.67 billion) due to increased working capital requirement, which rose from N3.90 billion in 2018 to N21.36 billion in 2019, necessitated by capacity enhancement.

Profit before Tax and Profit after Tax: Profit before Tax (PBT) rose 69.1% (y/y) from N39.17 billion in 2018 to N66.23 billion; Profit after Tax (PAT) was down from N64.10 billion to N60.61 billion in 2019, due to deferred tax credit in 2018. However, approvals for the extension of pioneer status on Obu line-1 and Kalambaina line-2 were granted in February, 2020 for 2-years and 3-years respectively.

Cash and cash equivalent: Cash and cash equivalent balances rose from N2.71 billion in 2018 to N15.02 billion in 2019, arising from a 69.16% increase in net cash flow from operations to N26.48 billion (2018; N15.66 billion) along with a net borrowing of N16.8 billion.

About BUA Cement Plc

BUA Cement Plc (Bloomberg; BUACEMENT:NL) is Nigeria’s second-largest cement producer and the largest producer in its North-West, South-South and South-East regions; with a combined installed capacity of 8 mmtpa and with plans underway to increase existing capacity to 11 mmtpa, through the commissioning of a new 3 mmtpa plant by the first half of 2021 in Sokoto State, Nigeria. BUA Cement operates strategically from Okpella, Edo State and Kalambaina, Sokoto State.

BUA Cement Plc is a business combination between CCNN Plc (Sokoto Cement) and BUA Cement Manufacturing Company’s Obu Cement Company. Currently listed on the Nigerian Stock Exchange (NSE), with a market capitalisation of N1.18 trillion ($3.3 billion), making it the third most capitalised company on the floor of the Exchange.

BUA Cement is committed to quality – a differentiating attribute, driven by its people, innovation, and technology; and positioned to solving Nigeria and Africa’s challenges while driving economic growth and development.

More information can be found here.

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