Lafarge Africa Gears Up for Historic Profit, N1trn Revenue in Sight –CSL
Lafarge Africa Plc is expected to deliver historical profit performance in financial year 2025 as analysts anticipate revenue to hit N1 trillion level. The cement company was valued at N2.343 trillion in the equity market on Friday after it lost 2.34% of its market value.
Analysts at CSL Stockbrokers Limited have reiterated their buy recommendation on Lafarge Africa in the most recent valuation update. They have set a target price of N199.14 per share, indicating a potential upside of 36.9% from the previous closing price of N145.50 per share.
Equity analysts are of the view that the cement company is trading at significant discount to its fair value, suggesting meaningful upside potential. In its unaudited H1 2025 results, Lafarge Africa grew revenue by 74.9% year-on-year, reaching N516.98 billion, driven by strong gains across all product categories.
The cement industry repriced the product amidst rising costs triggered by hydra-headed headline inflation in the country. All the members of cement oligarchy pushed their prices higher at a difference degree, influenced by perception and market share.
In the period, Lafarge Africa cement sales surged by 75.7% year on year to N504.36 billion, aggregates and concrete sales climbed 46.3% to N12.04 billion. Also, revenue from other products rose 72.3% to N577.91 million.
“This robust top-line performance, coupled lower financing expenses, drove pre-tax profit up 328.3% year on year to N199.74 billion”, CSL Stockbrokers Limited said in its review note.
“We project average cement prices to rise 30% year on year to N160,316 in 2025, alongside a 16.8% increase in sales volumes to 6.60 million metric tons”, the firm said.
Supported by both higher prices and growing volumes, analysts also estimated Lafarge Africa’s revenue will reach N1.07 trillion in 2025, translating to a 54.1% increase from the N696.76 billion recorded in FY 2024.
“We expect profitability to maintain its strong upward trajectory, underpinned by robust Revenue growth, moderated cost escalation and lower finance expenses”, CSL Stockbrokers Limited said. The cement company pretax profit is forecasted to increase by 198.6% to N455.37 billion in 2025.
CSL estimated that Lafarge Africa poised to hit record N1.07 trillion revenue in FY 2025.
On a quarter-on-quarter basis, the cement company revenue rose 8.2% to N268.63 billion in Q2 2025, compared to N248.35 billion in Q1 2025.
The growth in sales volume reflects strong underlying demand, fuelled by increased government capital expenditure (CAPEX) and a significant uptick in private-sector construction activities.
With infrastructure development remaining a government priority, cement demand is expected to stay robust. CSL Stockbrokers recalled that Lafarge Africa expanded the reach of its new ECOPlanet cement by launching it in Nigeria’s western market, following its earlier rollout in the eastern region in 2024.
Analysts also noted that the cement company introduced ground calcium carbonate in Q1 2025. Notably, ECOPlanet cement has quickly gained traction, now accounting for over 50% of Lafarge’s sales in the western region—a testament to growing customer acceptance.
“We expect continued market penetration of these innovative products to support further volume growth through financial year 2025. Cement prices are also expected to maintain an upward trajectory, driven by persistent inflationary pressures and strong industry pricing power”.
Analysts forecast average cement prices to rise by 30% year on year to N160,316 in 2025, alongside a projected 16.8% increase in sales volumes to 6.60 million metric tons.
Overall, supported by both higher prices and growing volumes, CSL Stockbrokers estimated Lafarge Africa’s revenue will reach N1.07 trillion in FY 2025—a 54.1% year on year increase from N696.76 billion recorded in 2024.
In the first half, the cement company’s cost of sales (excluding depreciation) rose 52.0% year on year to N204.92 billion, compared to N134.82 billion in H1 2024, largely reflecting sharp increases in input costs.
“Variable costs climbed 52.38% to N146.59 billion, while production fixed costs and maintenance fixed costs rose 76.18% and 21.66% to N36.67 billion and N21.67 billion, respectively”.
These increases were driven by the country’s elevated inflationary pressures and higher energy prices, CSL Stockbrokers Limited said.
Despite these cost headwinds, Lafarge Africa delivered a 94.1% year on year increase in gross profit to N312.06 billion. Its gross margin expanded by 6.0 percentage points to 60.36% in H1 2025, up from 54.39% in the same period last year.
Operating expenses as adjusted for depreciation increased by 53.9% year on year to N107.63 billion in H1 2025, up from N69.91 billion in H1 2024.
Analysts said the rise was driven by higher Selling & Distribution Expenses, which grew 44.3% year on year to N77.41 billion, and Administrative Expenses, which surged 85.8% year on year to N30.22 billion, both adjusted for depreciation.
Supported the bottom line, other Income—which includes gains from the disposal of property, plant and equipment, government grants, proceeds from scrap sales, and other miscellaneous sources—jumped 184.9% year on year to N4.72 billion, up from N1.66 billion in H1 2024.
Despite rising cost pressures, Lafarge Africa delivered a remarkable 126.0% year on year increase in earnings before interest tax depreciation and amortisation (EBITDA), reaching N209.08 billion in H1 2025, up from N92.53 billion in the same period last year.
According to CSL Stockbrokers, this translated into an improved EBITDA margin of 40.44%, a 9.1 percentage point rise from 31.30% in H1 2024. Depreciation and Amortisation Expenses increased by 23.4% year on year to N16.81 billion.
Lafarge Africa’s operating profit surged by 143.7% year on year to N192.27 billion, compared to N78.91 billion in H1 2024. The company continued to grapple with cost pressures stemming from a high-inflation environment and elevated energy prices.
However, analysts noted that strong topline growth helped cushion profit margins during the period. To address these pressures, the company has implemented several cost-optimization initiatives.
Notably, Lafarge introduced Calcined Clay—a lower-cost, lower-carbon alternative material—into production across key markets. The company also deployed 275 Compressed Natural Gas (CNG) trucks in H1 2025 to enhance logistics efficiency and reduce fuel-related expenses.
Furthermore, CSL said Lafarge is expected to realize increased cost savings from its broader Green Planet initiatives, particularly in the area of selling and distribution expenses.
“These strategic interventions are expected to moderate the growth of operating costs relative to Revenue. As a result, we forecast significant growth in EBITDA, projecting it to rise to N480.67 billion in FY 2025, up from N222.71 billion in FY 2024.
“This translates to a substantial improvement in EBITDA margin, which is expected to reach 41% in 2025, compared to 28% in the previous year”, the investment firm explained in its equity report.
In the first half of the year, Lafarge Africa net income came at N7.47 billion, a significant reversal from the net finance costs of N32.28 billion recorded in H1 2024.
Analysts said the improvement was driven by a sharp rise in finance income which reached N10.25 billion compared with N1.03 billion in the equivalent period in 2024, alongside a substantial decline in finance to N2.78 billion, down from N33.31 billion in the same period last year.
The steep drop in finance cost was primarily due to the absence of foreign exchange losses in the first half of 2025, following the company’s strategic decision to settle all outstanding FX obligations.
CSL said the remaining finance costs were mainly related to interest expenses and other financial charges. Analysts said the cement company’s finance costs is set to decline further as the having fully repaid outstanding balances from the unsecured CBN/BOI power and aviation intervention funds, previously accessed through GTCO and Zenith Bank.
“This repayment is expected to reduce the company’s debt-related obligations going forward. On the other hand, our projection for an increase in finance income is supported by Lafarge’s strong cash position, which allows the company to benefit from high-yield short-term deposit opportunities”.
Hence, analysts at CSL Stockbrokers Limited forecast net finance income of N15.03 billion for 2025, a sharp improvement from the net finance cost of N40.49 billion recorded in 2024.
Latest earnings results for half year 2025 showed Lafarge Africa delivered a strong bottom-line performance. Pretax profit surged by 328.3% year on year to N199.74 billion, compared to N46.63 billion in H1 2024.
Tax Expense also rose to N67.06 billion from N17.28 billion in the equivalent period in 2024, resulting in a net income of N132.68 billion—representing a remarkable 352.1% year on year increase from N29.35 billion in the prior year.
As a result, earnings per share (EPS) climbed by 352.1% year on year to N8.24/s, up from N1.82/s. CSL Stockbrokers projected Lafarge Africa’s profitability to continue on a steep upward trajectory, supported by robust revenue growth, moderated cost escalation, and lower finance obligations.
“We forecast a 198.6% increase in profit before tax (PBT) to N455.37 billion for 2025”, the firm said, adding that Lafarge Africa has reiterated its commitment to delivering value to shareholders, as demonstrated by the payment of an interim dividend in Q1 2025.
With a strong cash flow position and low leverage, the company is well-positioned to sustain and potentially increase dividend payouts over the near term. However, CSL noted some uncertainty remains regarding the pending regulatory approvals for the proposed acquisition by Huaxin Cement.
While management has expressed confidence in the successful completion of the transaction, the ongoing legal dispute initiated by Strategic Consultancy Limited—a minority shareholder—alongside challenges from other interested parties, poses a potential risk of delay.
“Unless swiftly resolved, these legal proceedings could postpone both the takeover and the eventual mandatory tender offer (MTO), thereby introducing a layer of uncertainty to Lafarge’s otherwise strong outlook”, CSL Stockbrokers Limited said in its report. #Lafarge Africa Gears Up for Historic Profit, N1trn Revenue in Sight –CSL Naira Trades Flat as CBN Injects US$150 mln into FX Market
