April 28, 2025/InvestmentOne Report

BUA Cement Plc recorded a revenue growth of 80.49% YoY to NGN290.82bn in Q1:2025, driven mostly by improved volumes amid favourable pricing dynamics during the period. Cost of sales (COS) was up by 31.25% YoY to NGN152.37bn, due to increases especially in energy cost (+48.85% YoY to NGN44.52bn), materials cost (+34.74% YoY to NGN20.13bn) and manufacturing expenses (+2.36% YoY to NGN43.07bn), mirroring the persistent inflationary environment. Nonetheless, gross margin expanded to 47.61% in Q1: 2025, significantly higher the 27.95% recorded in the corresponding period of the previous year.

Looking ahead, we expect BUA Cement to sustain its impressive performance aided by relative exchange rate stability despite a high-cost operating environment. The introduction of solid fuel at the Obu plant should support energy and cost optimization in subsequent quarters, in line with the cost-reduction initiatives being implemented by the group. Moreso, the construction of a 700TPD regasification plant at the Sokoto plant and project works for the 3MMTPA greenfield line at Ososo, Edo State progressing as planned, we remain optimistic about company s growth prospects. We therefore place a STRONG BUY rating on BUACEMENT.

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