BUA Cement Plc Delivers Record Growth and Robust Margins in 9M 2025

BUA Cement Plc (BUA CEMENT) reported an exceptional financial and operational performance for the first nine months of 2025, underscoring its continued leadership in Nigeria’s cement industry. The company’s revenue surged by 47.2% year-on-year (y/y) to ₦858.7 billion, driven by higher production output, improved plant reliability, and consistent operational efficiency. This strong topline performance highlights the success of BUA Cement’s strategic investments in plant optimisation, capacity expansion, and supply chain stability.

During Q3 2025, revenue rose 26.9% y/y to ₦278.4 billion, although it dipped marginally by 3.8% quarter-on-quarter (q/q) due to the seasonal slowdown in construction activities during the rainy season. Nonetheless, production volumes remained steady, supported by robust plant performance and stable raw material supply, ensuring that the company maintained its growth momentum.

Strong Cost Management and Margin Expansion

BUA Cement achieved substantial profitability gains during the review period, reflecting its disciplined cost management and growing operational efficiency. Gross profit rose by an impressive 137.4% y/y to ₦429.3 billion, as Cost of Goods Sold (COGS) increased only 6.7% y/y to ₦429.5 billion, significantly below the rate of revenue growth. This resulted in a remarkable gross margin expansion of 1,899 basis points (bps) to 50.0%, compared to 31.1% in 9M 2024.

The improvement was primarily driven by enhanced energy efficiency, greater use of alternative fuels, and the stabilization of input costs, particularly for power and raw materials. These measures, combined with strategic process automation and logistics optimization, have helped BUA Cement sustain competitive cost advantages within the Nigerian cement landscape.

Operating Leverage and Profitability Boost

Operating expenses rose 50.2% y/y to ₦64.9 billion, reflecting higher administrative and distribution costs associated with expanded production and market coverage. Despite this increase, the company achieved exceptional profitability, supported by slower growth in COGS and a 479.5% surge in other income, which provided an additional boost to operating margins.

Consequently, EBITDA grew 161.1% y/y to ₦376.9 billion, translating to an EBITDA margin of 43.9%, up by 1,915bps from the prior year. Similarly, EBIT margin expanded by 1,895bps y/y to 42.6%, underscoring the company’s strong operating leverage and its ability to convert revenue growth into sustainable earnings.

Major Turnaround in Finance Performance

BUA Cement recorded a significant turnaround in its below-the-line performance, reporting a net finance income of ₦46.1 billion in 9M 2025, compared to a net finance cost of ₦17.4 billion in the same period last year. This positive shift was primarily driven by a net foreign exchange gain of ₦21.6 billion, contrasting sharply with a ₦57.4 billion loss recorded in 9M 2024.

While interest expenses increased 165.6% y/y to ₦46.1 billion, largely due to higher borrowings for plant expansion and working capital requirements, the foreign exchange gains more than offset these costs. The company’s prudent treasury management and hedging strategy helped mitigate the impact of currency fluctuations, reflecting a marked improvement in financial stability.

Record Profitability and Earnings Growth

Benefiting from the combined impact of stronger revenue, lower financing costs, and improved cost control, Profit Before Tax (PBT) rose 448.2% y/y to ₦338.6 billion, while Profit After Tax (PAT) surged 491.9% y/y to ₦289.9 billion. The bottom-line growth was further supported by a lower effective tax rate of 14.4%, compared to 20.7% in the same period last year, reflecting the company’s growing efficiency in tax planning and fiscal management.

As a result, Earnings Per Share (EPS) jumped to ₦8.56, up from ₦1.45 in 9M 2024—an almost sixfold increase that underscores BUA Cement’s enhanced profitability and shareholder value creation.

Strong Balance Sheet and Financial Position

BUA Cement’s financial strength improved substantially during the period. The company’s net debt-to-EBITDA ratio declined sharply to 0.66x, compared to 2.94x in 9M 2024, reflecting higher earnings generation and reduced leverage. This improvement underscores the company’s robust cash flow position and its ability to finance ongoing expansion projects without compromising balance sheet stability.

Profitability metrics also strengthened considerably, with Return on Average Equity (ROAE) climbing to 77.5% (from 17.4% in 9M 2024) and Return on Average Assets (ROAA) rising to 24.1% (from 4.7% in the prior year). These ratios highlight the company’s superior efficiency in utilizing both equity and assets to generate shareholder returns.

Outlook: Sustained Growth and Strategic Resilience

BUA Cement’s 9M 2025 performance underscores its growing dominance in the Nigerian cement sector, driven by disciplined execution, cost efficiency, and strong demand fundamentals. The company’s commitment to energy optimization—particularly through increased use of alternative fuels—has not only improved cost efficiency but also strengthened sustainability credentials in line with global ESG standards.

Looking ahead, the company is poised to sustain its growth trajectory into Q4 2025 and beyond, supported by the expected rebound in construction activity following the rainy season, stable energy costs, and favorable pricing conditions. The continued ramp-up of production capacity at its new plants is also expected to enhance volume growth and further consolidate its market leadership.

Overall, BUA Cement remains well-positioned to close FY 2025 with strong margins, solid cash generation, and robust shareholder returns. The company’s unwavering focus on operational excellence, energy efficiency, and prudent financial management provides a firm foundation for continued growth in Nigeria’s evolving infrastructure landscape. SOURCE: Coronation Asset Management Limited