Rating Release
gusto & Co. hereby affirms the “A+“ rating assigned to BUA Cement PLC with a stable outlook
The rating expires on 30-06-23
Agusto & Co. hereby affirms the “A+“ rating assigned to BUA Cement PLC (“BCP”, “BUA”, “BUA Cement” or “the Company”). The rating reflects our opinion on the Company’s good profitability, strong cash flow and adequate working capital position due to BCP’s favourable terms of trade with customers and suppliers as well as low leverage supported by the full repayment of the expensive shareholder loans. The rating is also strengthened by the Company’s strategic position in the Nigerian Cement Industry and a stable, qualified & experienced management team. Nonetheless, the rating is constrained by a concentrated ownership structure, the potential elevation in the Company’s cost profile on the back of the increase in royalty on limestone as well as inflationary pressures and foreign exchange volatilities.
BUA Cement PLC is one of the leading players in the Nigerian Cement Industry with a total installed capacity of 11 million metric tonnes (MMT) per annum as at 31 March 2022 and operating from production plants in Sokoto and Edo states. BUA Cement PLC, which is a result of the merger between Cement Company of Northern Nigeria (CCNN) and OBU Cement PLC, is well-positioned to benefit from the potential growth in the Nigerian Cement Industry in the medium term supported by a combination of plant expansion strategies, efficient route to market initiatives and energy-efficient solutions.
The opinions expressed in this rating release do not represent investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.
