BUA Cement Bolsters Earnings; Profit Rises by 351% in Q1
BUA Cement Plc bolstered earnings performance strongly in the first quarter of 2025, signaling the previous trend has started to reverse. In the first quarter of 2025, the cement company’s net income rose by 351.4% to N81.124 billion from N17.97 billion posted in the comparable period in 2024.
The impressive uptick was driven by strong revenue growth, efficient cost management, and a significant reduction in exchange losses, according to analysts.
BUA Cement revenue grew by 80.5% year-on-year to N290.812 billion in Q1, according to the company’s unaudited financial statement, from N161.131 billion in the similar period in 2024.
Analysts said the revenue growth was driven by higher volumes, supported by strong infrastructure-led demand and improved production from both existing facilities and recently commissioned plants.
CardinalStone Securities Limited noted an improved pricing during the period, reverting to normalized levels following a temporary reduction in October 2023 – which the company implemented to support volume ramp-up from the new plants.
The cement company’s cost of goods sold rose 31.2% year on year from N116.091 billion to N152.4 billion in Q1-2025, driven by increases in material costs and energy costs. However, analysts noted that cost growth was tempered by improved efficiency by the management and a high base from the prior year.
The cement company’s operating expenses was up by 73.8% year on year to N20.2 billion, largely due to a significant rise in distribution expenses. Details from its unaudited results showed that distribution expenses rose by +112.8% to N10.5 billion.
Despite these cost pressures, robust top-line growth more than offset the increase in expenses, resulting in a 20.2 percentage point’s expansion in earnings before interest and tax (EBIT) margin to 40.9%, CardinalStone Securities Limited said in a review note.
BUA Cement reported that the company’s net interest costs surged 878.7% year on year to N17.8 billion from N1.818 billion in the comparable period.
The strong increase in net finance costs was driven by strong borrowings. The Q1-2025 financial scorecard showed that interest in borrowed funds rose sharply, up by 296.1% year on year to N19.3 billion at the time interest income nosedived.
Q1 results showed that the company’s interest income fell by -50.0% to N1.5 billion. Notably, following recent naira stability, and improved internal foreign exchange exposure management, net exchange losses declined 91.7% to N836.8 million.
This helped propel pretax margin up by 21.1 percentage points to 34.3%. Effective tax rate rose 3.1 ppts to 18.7% due to increased deferred tax charges.
Nevertheless, the net profit margin improved 16.5 percentage points to 27.9%, with net profit surging 351.4% YoY to N81.1 billion. The net profit for the quarter exceeded the total net profit recorded in 2024. #BUA Cement Bolsters Earnings; Profit Rises by 351% in Q1#
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