October 23, 2025/InvestmentOne Report

Lafarge Africa Plc delivered an impressive 62.77% YoY growth in revenue to NGN780.49bn in 9M:2025, driven by higher volumes and improved capacity utilization. The introduction of ECOCrete, Nigeria s first low-carbon ready-mix concrete, in Q3:2025, alongside earlier product launch including Ground Calcium Carbonate (GCC) in Q1:2025 and ECOPlanet cement in the Western market in Q2:2025, reinforced Lafarge s leadership in sustainable construction solutions. These largely contributed to the increase in revenue in 9M:2025 amid slight price upticks as seen in the slower increase in Cost of sales (COS) relative to revenue growth.

COS notched higher by 34.18% YoY to NGN324.363bn, due to increases in production variable costs to NGN217.12bn from NGN158.44bn in the previous year – accounting for 66.94% of total COS. The tapered increase likely reflects the slowing inflationary environment alongside relatively stable domestic energy price. Production fixed cost, which comprises personnel expenses, by-products costs and electrical energy expenses rose faster by 49.22% YoY to NGN48.38bn. The gross profit margin expanded by 885bps to 58.44% in 9M:2025.

Operating profit surged 129.41% to NGN192.27bn, hinged on the robust sales growth and supported by a 110.52% increase in other income to NGN4.78bn, mainly from insurance claims recovered in Q2:2025, which amounted to NGN3.79bn, alongside income from sales of scraps and other miscellaneous income (+107.29% YoY to NGN758.20mn). Despite cost pressures seen across selling & distribution (+41.43% YoY to NGN117.24bn) and administrative expense (+66.89% YoY to NGN26.84bn) lines, operating margin ticked higher to 38.23% in 9M:2025 from 27.13% in 9M:2024.

Finance Income Boost Bottom Line: Profit Before Tax (PBT) advanced by 232.14% YoY to NGN313.29bn in 9M:2025, supported by a sharp rise in finance income to NGN20.28bn from NGN810.54mn in the previous year. Specifically, interest income from short term fixed deposits and current accounts amounted to NGN17.02bn while net foreign exchange gains amounted to NGN3.26bn. Following the relative stability of the local currency and strategic deleveraging efforts from the group, finance cost significantly fell to NGN5.40bn from NGN36.56bn in the preceding year. However, the lingering impact of the high-interest rate environment remained evident, with interest paid on borrowings accelerating by 163.57% YoY to NGN3.77bn in the reviewed period.

After applying an effective tax rate of 33.68%, income tax expense amounted to NGN105.51bn, with Profit After Tax (PAT) printing at NGN207.78bn – a 245.86% YoY advancement compared to the previous year and supported by a low base. Consequently, PAT margin was up by 1,409bps to print at 26.62%. Earnings Per Share (EPS) jumped to NGN12.90 kobo from NGN3.73 kobo in 9M:2024.

Outlook: Lafarge Africa is positioned to sustain its growth momentum, supported by increased operational efficiency, product innovation, and steady demand from infrastructure and housing projects especially in the last quarter of the year. Additionally, improved cost efficiency and lower finance costs should further strengthen profitability amid its deleveraging strategy and the anticipated lower interest rate environment. Hence, we place a STRONG BUY rating on WAPCO.

Lafarge Africa is positioned to sustain its growth momentum, supported by increased operational efficiency, product innovation, and steady demand from infrastructure and housing projects especially in the last quarter of the year. Additionally, improved cost efficiency and lower finance costs should further strengthen profitability amid its deleveraging strategy and the anticipated lower interest rate environment. Hence, we place a STRONG BUY rating on WAPCO.

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