July 31, 2025/InvestmentOne Report

BUA Cement Plc recorded a 59.45% YoY growth in revenue to NGN580.30bn in H1:2025, driven mostly by price increases. Cost of sales (COS) was up by 15.67% YoY to NGN294.55bn, on the back of increases especially in energy cost (+10.56% YoY to NGN77.91bn), stock movement (+169.10% YoY to NGN51.05bn) and materials cost (+24.00% YoY to NGN38.53bn). While the inflationary environment remains elevated, manufacturing expenses fell by 17.28% YoY to NGN72.61bn, helping to temper the overall rise in production costs. As such, gross margin expanded to 49.24%, higher than 30.03% recorded in H1:2024.

We expect BUA Cement to sustain its growth momentum in H2:2025, supported by the relative stability in the exchange rate, despite the high-cost operating environment. We anticipate seeing margin gains, on the back of the group s commitment to Its cost efficiency initiatives amid expectations for economic tailwinds in the latter half of the year. Furthermore, progress on the construction of the 700TPD regasification plant at the Sokoto facility remains on track, hence, reinforcing our positive outlook on the company s long-term capacity and cost optimization strategy. We therefore place an OVERWEIGHT rating on BUACEMENT.

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