October 22, 2025/Cordros Report
Lafarge Africa Plc (WAPCO) released its Q3-25 unaudited financial results today, reporting a 144.5% y/y increase in Q3-25 standalone EPS to NGN4.66, fueled by strong topline expansion (+43.3% y/y) and significant EBITDA margin accretion (+11.41ppts y/y). Consequently, 9M-25 EPS grew by 245.9% y/y to NGN12.90 (9M-24: NGN3.73).
Q3-25 revenue expanded by 43.3% y/y (9M-25: +62.6% y/y), reflecting growth across all major segments—cement (+42.4% y/y | 96.9% of revenue) and aggregates & concrete (+69.6% y/y | 3.1% of revenue). Management attributed the strong topline to improved volumes and enhanced plant reliability, with capacity utilisation improving by c.7.0%. We also believe that price increases contributed meaningfully to the growth. However, revenue declined slightly by 1.9% q/q, reflecting the typical Q3 slowdown caused by heavy rainfall affecting construction activity.
Unsurprisingly, gross margin expanded by 10.90ppts y/y to 63.8% (9M-25: +771bps y/y to 61.5%) due to slower growth in cost of sales ex-depreciation (+10.1% y/y | 9M-25: +35.6% y/y) relative to revenue. The moderation in costs reflects a tempered 13.3% y/y increase in variable cost (73.9% of COGS) and a 0.9% y/y growth in maintenance fixed cost (13.9% of COGS). The slowdown in these cost elements is attributable to lower energy prices, increased use of alternative fuels, and relative FX stability.
As a result, EBITDA and EBIT margins improved by 11.41ppts y/y and 12.46ppts y/y to 43.6% and 40.3%, respectively, (9M-25: +986bps y/y and +11.11ppts y/y to 41.5% and 38.2%, respectively) despite a 37.5% y/y increase in OPEX (ex-depreciation). The OPEX increase was primarily driven by higher distribution expenses (+30.4% y/y; 67.0% of OPEX), reflecting logistics-related fuel costs.
Below the operating line, WAPCO reported a net finance income of NGN7.42 billion in Q3-25, a reversal from a net finance cost of NGN3.47 billion in Q3-24. This was supported by a 53.2x y/y increase in finance income to NGN9.84 billion and a NGN193.36 million net FX gain, which offset the 24.0% y/y increase in finance costs to NGN2.61 billion. In 9M-25, net finance income grew by 20.0x y/y to NGN17.02 billion.
Ultimately, profit before tax grew by 138.1% y/y to NGN113.55 billion, while profit after tax expanded by 144.5% y/y to NGN75.10 billion.
Comment: WAPCO extended the strong momentum from H1-25 into Q3-25, supported by favourable pricing dynamics, volume growth, and easing cost pressures. While the quarter marginally underperformed Q2-25 due to seasonally weaker cement demand following the rainy season, the performance remains solid within the context of typical Q3 cyclicality. Looking ahead, we expect earnings resilience to be sustained over the remainder of the year, underpinned by a supportive macroeconomic backdrop, continued product innovation and market penetration, operational efficiency gains from improved plant utilisation, stable energy pricing and increased alternative fuel adoption. Our estimates are under review.
