BUA Cement profit jumps 80% to N324.9bn on cost discipline, new markets entry

BUA Cement Plc delivered one of its strongest half-year performances in recent years, with profit after tax rising by 80 percent to N324.88 billion in the first six months of 2026.

The unaudited financial statements released on Thursday showed that revenue increased by 25.6 percent to N728.93 billion from N580.30 billion in the corresponding period of 2025, while profit before tax climbed 79 percent to N384.44 billion, underscoring the company’s ability to convert sales growth into significantly higher earnings.

The breakdown shows bagged cement remained the dominant contributor with N688.77 billion, but bulk cement sales rose sharply to N40.15 billion, compared with only N236 million in the corresponding period of 2025.

Perhaps the biggest highlight of the results is the widening gap between revenue growth and production costs.

While sales rose by 25.6 percent, the cost of sales increased by only 2.7 percent to N301.89 billion, enabling gross profit to surge almost 49 percent to N427.03 billion from N286.36 billion a year earlier.

Consequently, gross margin strengthened to about 58.6 percent, compared with roughly 49.3 percent in the corresponding period last year.

The company’s operating profit also grew by 51.3 percent to N371.27 billion, reflecting stronger operational efficiency despite higher selling and administrative expenses. Selling and distribution costs rose to N40.45 billion from N29.81 billion, largely reflecting increased distribution activities, while administrative expenses increased to N15.83 billion from N12.21 billion.

The company’s earnings release attributed the improved profitability to continued cost containment across operations, stronger contributions from its “new market” business segment, disciplined treasury management, ad a stable foreign exchange environment.

According to the company, direct production cost per tonne declined 4.4 percent year-on-year, while the operating ratio improved significantly to 49.1 percent from 57.9 percent a year earlier. EBITDA margin also strengthened to 54 percent from 46.3 percent.

One of the most significant changes in the financial performance came from foreign exchange movements.

BUA Cement recorded a net foreign exchange gain of N16.57 billion during the first half of 2026 compared with only N782.8 million in the same period last year and a N9.70 billion foreign exchange loss for the full 2025 financial year.

This marked reversal reflects the relatively more stable exchange rate environment that has followed the sharp currency adjustments experienced over the previous two years.

The improvement helped reduce overall net finance costs to just N3.41 billion, compared with N31.37 billion in the corresponding period of 2025, despite the company continuing to carry substantial borrowings.

Finance income also increased sharply to N18.73 billion, supported by higher interest earned on cash balances.

BUA Cement continued to generate significant operating cash flows despite paying substantial dividends and investing heavily in capacity expansion.

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Net cash generated from operating activities stood at N278.45 billion, demonstrating the business’ strong cash conversion capability. Capital expenditure reached over N60.67 billion, largely invested in property, plant and equipment as the company continues expanding production capacity.

Property, plant and equipment increased to N1.22 trillion from N1.18 trillion at the end of 2025, reflecting continued investment in production assets and projects under construction. Construction work-in-progress alone rose to about N183.86 billion, highlighting ongoing expansion activities.

The earning note stated that BUA Cement is progressing with plans to expand installed production capacity from 17 million metric tonnes per annum to 20 million metric tonnes, including the construction of a greenfield cement plant in Ososo, Edo State.

Commenting on the results, Yusuf Binji, managing director and chief executive officer, said the company remained focused on capturing new growth opportunities while maintaining cost discipline.

“We have delivered a strong quarter despite the constraints encountered,” Binji said.

He noted that the company’s growth initiatives and cost optimisation programmes were gaining traction and expressed confidence that ongoing process improvements would deliver higher productivity and better cost management in the coming quarters.

“I am very encouraged by our outlook and performance over the next quarters,” he added.