August 6, 2024/CSL Research

In the first half of 2024, the Nigerian cement industry experienced significant topline growth, with total revenue of all the listed players in the sector rising significantly by 76.67% y/y to N2.42 trillion, compared to N1.37 trillion in the same period in 2023. This robust increase was driven by higher prices and increased sales volumes due to heightened demand from increased government capital expenditure (CAPEX) and private-sector activity. Dangote Cement, the leading manufacturer in the sector, played a crucial role in this growth, with its revenue soaring by 85.11% to N1.76 trillion in H1 2024, up from N950.83 billion in H1 2023.

BUA Cement, the second-largest cement producer in Nigeria, also posted impressive results, with revenue growing by 64.63% y/y to N363.94 billion in H1 2024, compared to N221.07 billion in H1 2023. Similarly, Lafarge Africa saw a substantial revenue increase of 49.5% y/y, reaching N295.58 billion in H1 2024, up from N197.68 billion in the previous year.

Despite increased demand, the cement sector encountered significant challenges due to macroeconomic pressures, most notably the depreciation of the Naira. This depreciation led to substantial foreign exchange (FX) losses for the three listed players amounting to N261.19 billion—a 125.6% y/y increase. These FX losses significantly impacted the financial performance of the companies, with two of the three major players seeing declines in pre-tax profits.

WAPCO reported a notable 15.7% drop in Pre-tax Profit to N46.63 billion, while BUA Cement’s Pre-tax Profit fell by 47.5% y/y to N40.13 billion. In contrast, Dangote Cement managed to report a Pre-tax profit of N292.96 billion, marking a 22.1% increase from the previous year. This strong performance was bolstered by robust revenue growth, driven by improved sales volumes from its Nigerian operations, which helped offset the negative impact of FX losses and strengthen its bottom line.

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