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Benue Cement posts N27 bn turnover

Benue Cement Company (BCC) Plc has recorded a turnover of N27.23 billion in its third quarter results ended September 2009.

It  posted a Profit After Tax (PAT) of N12.97 billion for the year under review. The company’s performance in third quarter  was stifled by the limited supply of LPFO, its key energy input

BCC, however, noted that LPFO supply to its Kilns has normalized and on this, expects fourth quarter performance to be more favorable relative to previous quarters

The company’s Profit Before Tax ( PBT) margin dropped to 47.63 per cent from 48.74 per cent  in third quarter 2008, while PAT margin rose to 47.63 per cent from 42.73 per ent  respectively in third quarter 2008.

Vetiva Capital in its research report stated that the company’s performance for the quarter under review was lower than its expectation of N31.50 billion for turnover  while its PAT surpassed its  forecasts of N11.25 billion
According to Vetiva, “In our earnings release report on the company’s Q2 performance, we
indicated that irregular supply of LPFO in the country had negative impacts on BCC’s operations, reducing plant capacity utilization levels. Although the company had forecast an improved performance relative to Q2, Q3 results were not as good as Q2 positions.”

Vetiva stated that the company’s Q3 expectation had been premised on measures it had put in place to ensure an improved supply of LPFO. Some of the measures taken by the company according to Vetiva include the construction of a 75,000 litre tank farm for LPFO storage as well as the signing of agreements with a number of haulage companies. Its Q3 performance however shows that full effect of the measures is yet to impact on its operations.

According to Vetiva, “The company estimates its sales volume for Q3 at 296,000 metric tonnes, compared with 384,000 metric tonnes and 379,000 metric tonnes in Q2 and Q1 respectively. The company noted that Kiln fuel
(LPFO) supply to its plants has normalized, which in our view premised BCC’s bullish sales volume forecast for Q4, which it set at 501,000 metric tonnes.”

On BCC expectation, for fourth quarter,  According to Vetiva, “ The company recently revised its turnover and PAT forecast for full year 2009,downward, from N59.46 billion and N22.16 billion respectively to N40.16 billion and N18.62 billion respectively.

The company attributed this downward revision to the challenges faced by the company in securing steady supply of LPFO in

“ Even though we recognize these new forecasts as being more realistic, we are of the view that they may be slightly optimistic in light of present day challenges, as they imply Turnover and PAT contributions of N12.93 billion and N5.65 billion respectively in Q4, the highest for all the quarters so far this year.”


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