July 28, 20205/Cordros Report

BUA Cement Plc (BUACEMENT) published Q2-25 unaudited financials on Friday (25 July), posting a standalone EPS of NGN2.95 (+512.7% y/y), bringing the H1-25 EPS to NGN5.34 (H1-24: NGN1.01). The significant increase in EPS was underpinned by a 42.7% y/y surge in revenue, reflecting a favourable price-volume mix, coupled with only a marginal 0.2% y/y rise in cost of sales (ex-depreciation).

BUACEMENT’s revenue grew by 42.7% y/y to NGN289.48 billion in Q2-25 (H1-25: +59.4% y/y to NGN580.30 billion), driven by both price and volume gains relative to the same period last year. However, revenue declined slightly by 0.5% quarter-on-quarter, likely due to seasonally lower sales volumes during the rainy season.

Gross margin expanded by 19.58ppts to 53.8% (H1-25: +19.28ppts to 52.2%), supported by minimal cost growth (+0.2% y/y). The lower growth in costs reflects the impact of exchange rate stability and effective cost reduction strategies, which led to decreases in energy costs (-17.7% y/y), operations and maintenance service charges (-53.6% y/y), and manufacturing expenses (-35.5% y/y).

Sequentially, EBITDA and EBIT margins also saw a strong increase, rising by 20.58ppts and 19.75ppts to 47.9% and 43.6%, respectively, in Q2-25 (H1-25: +20.28 ppts y/y and +19.77 ppts y/y to 46.5% and 42.3%, respectively). This was achieved despite a 23.7% y/y increase in operating expenses (ex-depreciation) to NGN17.55 billion, driven primarily by a 26.8% y/y rise in distribution costs, which accounted for 53.1% of total OPEX.

At the same time, net finance costs declined by 59.0% y/y to NGN11.96 billion, supported by FX-related gains of NGN1.62 billion in Q2-25 (vs. FX loss of NGN29.92 billion in Q2-24). This helped offset a 22.3% y/y decline in interest income and a 213.5% y/y increase in interest expense to NGN18.81 billion. For H1-25, net finance costs declined by 25.5% y/y to NGN30.59 billion.
 
Overall, profit before tax (PBT) soared by 510.7% y/y to NGN115.06 billion, while profit after tax (PAT) rose by 512.7% y/y to NGN99.77 billion, after accounting for a tax charge of NGN15.29 billion.
 
Comment: BUACEMENT carried over its Q1-25 momentum into the second quarter, delivering another strong performance marked by sustained revenue growth, significant margin expansion, and disciplined cost control. Earnings were further supported by FX-related gains and improved operational leverage. Looking ahead, we expect the company’s positive trajectory to continue, buoyed by resilient demand, ongoing cost-saving measures, and a relatively stable macroeconomic environment. Our estimates are under review.