BUA and Lafarge Cement Profits Soar in Q1 2025 Amid Booming Sales and Strong Margins

Nigeria’s cement industry kicked off 2025 with record-breaking profits as both BUA Cement Plc and Lafarge Africa Plc posted exceptional first-quarter results, driven by surging demand, higher prices, and improved cost efficiency. 

The impressive financial performance reflects the underlying strength of the sector and its resilience in the face of macroeconomic pressures, particularly inflation and currency volatility.

BUA Cement: Q1 2025 Profits Exceed Full-Year 2024

BUA Cement Plc recorded a phenomenal 368.58% year-on-year growth in pre-tax profit, reaching ₦99.74 billion in Q1 2025. Even more notable is its 351.45% surge in net income, with profit after tax climbing to ₦81.12 billion, surpassing the company’s entire profit for the full year of 2024 in just three months.

The company’s revenue grew by 80.49% to ₦290.82 billion, while cost of sales rose at a significantly slower pace—just 31.25%—allowing BUA Cement to post a 207.41% jump in gross profit to ₦138.45 billion. This improved the gross margin to 47.61%, up from around 28% in the previous year.

Despite a 106.46% rise in selling and distribution expenses and a nearly ninefold increase in finance costs, BUA’s operating profit still soared 255.57% to ₦119.03 billion. One of the key drivers of this exceptional performance was a sharp reduction in foreign exchange losses, which dropped from over ₦10 billion in Q1 2024 to just ₦837 million this year.

On the balance sheet, BUA Cement’s total assets rose slightly to ₦1.58 trillion, while its debt ballooned by over 382% to ₦447.62 billion. However, strong growth in shareholders’ equity to ₦469.67 billion helped maintain a healthier leverage ratio of 3.37. Despite the stellar earnings, BUA Cement’s share price dipped by 10% year-to-date, closing at ₦83.70 as of April 24, 2025.

Lafarge Africa: Cement Sales Fuel 739% Profit Jump

Lafarge Africa Plc also reported extraordinary growth in Q1 2025, with pre-tax profit soaring 739.47% to ₦73.1 billion, up from ₦8.7 billion in Q1 2024. This massive surge was driven primarily by strong cement demand and pricing power, which resulted in an 80.26% increase in revenue to ₦248.3 billion.

Cement sales were the main revenue contributor, generating ₦242.6 billion, while aggregates and concrete accounted for ₦5.4 billion. Although the company’s cost of sales rose by 73.82% to ₦125.3 billion, Lafarge still posted an 87.34% growth in gross profit, totaling ₦122.9 billion.

Operational performance remained strong with operating profit rising 136.97% year-on-year to ₦71.6 billion, despite rising selling and distribution costs (₦38.9 billion, +45.87%) and administrative expenses (₦12.9 billion, +56.21%).

Lafarge’s balance sheet also reflected this strong showing. The company’s total assets reached ₦914.7 billion, while retained earnings climbed 15.41% to ₦364.2 billion, further solidifying its financial position. On the Nigerian Exchange, Lafarge Africa’s share price stood at ₦79.20 as of April 24, with the company boasting a 122% year-to-date performance in 2024.

What’s Fueling the Surge?

Several factors contributed to these unprecedented earnings:

• Higher Revenue from Cement Sales: Both companies benefited from robust construction activity and price adjustments, which significantly boosted their top lines.
• Cost Control and Margin Expansion: Revenue growth outpaced cost increases, allowing for strong margin expansion. BUA Cement’s gross margin rose to nearly 48%, while Lafarge saw its gross profit jump by over 87%.
• Reduced FX Losses: The relative stability of the naira compared to last year helped reduce foreign exchange losses for both firms, particularly for BUA Cement.
• Operational Leverage: Fixed costs were better absorbed due to increased output, amplifying profit growth.

Market Implications and Outlook

The remarkable earnings from BUA Cement and Lafarge Africa reaffirm the strong fundamentals of Nigeria’s cement industry. The Q1 performance suggests that if macroeconomic conditions remain relatively stable, both companies are well-positioned to sustain their profitability through 2025.

However, rising debts, as evident in BUA’s balance sheet, increasing operational costs, and foreign exchange uncertainties could present challenges. Investors will also watch closely how the companies manage inflationary pressures and balance sheet risks moving forward.

With construction activities and infrastructure spending projected to remain strong, Nigeria’s leading cement manufacturers may continue to deliver impressive results; however, profitability will likely depend on their ability to control costs and maintain pricing power.