Nigerian Billionaire Predicts New Naira to Dollar Rate as Dollar Depreciates
- Abdul Samad Rabiu praised the CBN's foreign exchange reforms for eliminating the need for businesses to lobby for FX, highlighting the current market-driven and transparent regime
- Despite foreign exchange losses, BUA Cement's sales surged to N877 billion in 2024, with a 48.2% increase in profit before taxes, driven by improved operational efficiency and strategic pricing
- Rabiu also forecasted a stronger naira and predicted that the company would continue its growth, with plans for further investment in energy efficiency and local content
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Abdul Samad Rabiu, chairman of BUA Cement Plc, claims that the Central Bank of Nigeria's foreign exchange reforms have eliminated the need for businesses to lobby for FX.
Source: UGC
During a media briefing held Monday in Abuja after BUA Cement Plc's 9th Annual General Meeting, Rabiu made the statements.
In contrast to earlier practices that, in his opinion, produced an artificial scarcity and compelled businesses to ask for favors in order to obtain dollars, he characterised the current FX regime as being more transparent and market-driven.
“I was making a joke a few weeks ago that I’ve only seen the current CBN Governor maybe twice since his appointment. That’s because I don’t need him. “Before now, I used to visit the CBN every two weeks to lobby for FX. That was the only way to survive,” Rabiu said.
He criticised the previous FX system, pointing out that it led to distortions and restricted access for many businesses because the official rate was much lower than the parallel market rate.
“The rate was N500 or N600 officially, but nobody could get it. On the street, it was closer to N1,000. It was an artificial rate,” he said.
The BUA chairman praised the current reforms for unifying the market, saying, “Now, the rate you get is what everyone else gets. You go to the bank, you get FX at the market rate.”
Naira dollar prediction
Rabiu predicted that the exchange rate might drop to about N1,200/$ in the upcoming months, from highs of almost N2,000 earlier in the year, and voiced optimism that the naira would continue to rise.
He went on to say that the stronger naira was already lowering the cost of food and cement, among other things.
In response to queries about cement prices, Rabiu clarified that recent price increases were caused in part by the high cost of production, which was influenced by energy expenses, foreign equipment, and fluctuations in foreign exchange rates. He claimed that BUA had made an effort to maintain price stability in spite of these difficulties.
Regarding the company's financials, Rabiu stated that despite N93.9 billion in foreign exchange losses, BUA Cement increased its sales from N460 billion in 2023 to N877 billion in 2024.
He said that the company's return on average capital employed increased to 15% from 10% in 2023 and that profit before taxes increased by 48.2% to N99.63 billion.
In 2024, earnings per share climbed 6.3% to N2.18 from N2.05 in 2023.Even as the company absorbed rising input costs, this performance was fueled by a combination of prudent pricing strategies and increased dispatch volumes.
“Cash generation grew significantly, enabling increased capital expenditure financing and supporting our strategic efforts to reduce exposure to foreign currency obligations. This was achieved by paying down import finance facilities and aligning accrued interest payments with available cash flows,” he said.
Additionally, Rabiu disclosed that BUA Cement's Q1 2025 profit after tax was N81 billion, exceeding the company's total 2024 earnings. According to his projections, full-year 2025 earnings might reach N250 billion. He attributed this gain to greater production capacity, less foreign exchange losses, and improved operational efficiency.
In light of the recent commissioning of two more cement lines in Sokoto and Edo States, he affirmed that the company has no urgent intentions to increase its capacity beyond its present 20 million metric tons.
A N2.05 dividend per share, or a 94% payout ratio, would be paid out, Rabiu added, reinforcing BUA's dedication to shareholder value.
Source: Getty Images
The company has demonstrated outstanding financial performance, resilience, strategic agility, and a strong commitment to growth in a dynamic environment, according to Yusuf Binji, Managing Director and CEO of BUA Cement.
In order to ensure supplies and save costs, Binji claimed the company was constructing a 700-tonne-per-day LNG regasification plant to handle its biggest cost driver, energy.
In order to lower operating expenses and lessen FX exposure, he said that BUA Cement had renegotiated current service contracts in favor of local content.
Rewane predicts new naira against US dollar
Legit.ng reported that Bismarck Rewane, the Chief Executive Officer (CEO) of Financial Derivatives Company, has projected that the naira will trade between N1,600 and N1,650 in the official foreign exchange market in June and July.
He cited data that indicated effective measures by the Central Bank of Nigeria to manage money supply growth, which peaked at 78% in May last year, as the basis for his projection about the Nigerian currency.
He gave this projection while speaking at the recent Lagos Business School breakfast club meeting.
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Source: Legit.ng
