March 6, 2026/InvestmentOne Report

BUA Cement Plc delivered a 34.57% YoY growth in revenue to NGN1.18trn in FY:2025, largely driven by price increases, as Cost of Sales (COS) declined modestly by 0.16% YoY to NGN575.26bn.  The moderation in COS was mostly due to lower energy costs (-13.36% YoY to NGN244.75bn), and operation & maintenance service charges (-29.00% YoY to NGN152.85bn).

However, raw materials cost accelerated by 678.92% YoY to NGN95.17bn during the period. Supported by robust topline performance and the relatively muted growth in COS, gross profit surged by 101.22% YoY to NGN604.18bn. Consequently, Gross margin expanded by 1,697bps to 51.23%, higher than 34.26% recorded in FY:2024.

Operating profit advanced by 249.65% YoY to NGN504.55bn, driving operating margin higher to 42.78% from 16.46% in the prior year, hinged on the impressive topline growth and supported by a 41.46% YoY rise in other income to NGN1.50bn. This was due to increases in sundry income (+187.80% YoY to NGN847.52mn) and amortization of government grants which amounted to NGN640.84mn. Nonetheless, operating expenses remained under pressure, with selling & distribution expenses increasing by 48.42% YoY to NGN63.61bn and administrative costs rising by 26.13% YoY to NGN27.83bn.

Net Finance Cost Tapers: Net finance cost tapered to NGN39.28bn, on the back of lower interest expenses incurred during the period, amid the NGN17.01bn interest income received in FY:2025. Interestingly, net foreign exchange loss amounted to NGN9.69bn – a significant reversal from the NGN92.11bn loss posted in FY:2024, due to the appreciation of the foreign exchange rate seen in the year.

Profit Before Tax (PBT) jumped by 324.70% YoY to NGN465.28bn in FY:2025, supported by strong revenue growth alongside the superb operating performance. After the deduction of NGN109.24bn as tax expense (i.e. 30.00% tax rate), Profit After Tax (PAT) amounted to NGN356.04bn – a significant 381.72% YoY rise in PAT. Consequently, Earnings Per Share (EPS) rose to NGN10.51 kobo from NGN2.18 kobo in the preceding year.

Corporate Action: BUA Cement Plc announced a final dividend of NGN10.00 per ordinary share to be paid to shareholders on 21st May 2026, whose names appear in the Register of Members as of 8th May 2026.

BUA Cement Plc is well positioned to sustain its earnings momentum in 2026, supported by improved exchange rate stability and sustained cost discipline, despite a still-elevated operating environment. The introduction of solid fuel at the Obu plant should support energy and cost optimization in FY:2026, in line with the cost-reduction initiatives being implemented by the group. With a PE ratio of 21.40x which we believe is already stretched, we forecast a target price of NGN214.87 kobo per share and place an UNDERWEIGHT rating on BUACEMENT.

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