BUA Cement Profit Jumps 80% to N324.9 Billion as Production Costs Stabilise

BUA Cement Plc reported a 79.6 percent increase in profit after tax to N324.88 billion for the six months ended June 30, 2026 as strong revenue growth, limited increases in production costs and lower finance expenses drove a substantial expansion in margins.

Profit increased from N180.90 billion in the corresponding period of 2025, while earnings per share rose to N9.59 from N5.34.

Revenue grew by 25.6 percent to N728.93 billion from N580.30 billion. Cost of sales, however, increased by only 2.7 percent to N301.89 billion from N293.94 billion.

The significant difference between revenue and production-cost growth lifted gross profit by 49.1 percent to N427.03 billion from N286.36 billion.

BUA Cement’s gross profit margin consequently expanded to 58.6 percent from 49.3 percent, representing an improvement of more than nine percentage points.

The result suggests that higher selling prices, greater production efficiency or a more favourable cost environment strengthened the economics of the cement business.

The available statement does not separate the contribution of pricing, sales volume and production costs, making the sustainability of the margin expansion difficult to determine.

Operating expenses continued to rise faster than revenue. Selling and distribution costs increased by 35.7 percent to N40.45 billion, while administrative expenses climbed by 29.6 percent to N15.83 billion.

Despite these increases, operating profit surged by 51.3 percent to N371.27 billion from N245.39 billion. The operating margin improved to 50.9 percent from 42.3 percent.

The earnings performance also benefited from a substantial reduction in financing pressure.

Finance income almost tripled to N18.73 billion from N6.76 billion, while finance costs declined by 41.9 percent to N22.14 billion from N38.14 billion.

Net finance costs therefore fell by 89.1 percent to N3.41 billion from N31.37 billion, removing a major drag on profitability.

BUA Cement also recorded a net foreign-exchange gain of N16.57 billion, compared with N782.82 million in the corresponding period. The improvement added approximately N15.79 billion to pre-tax earnings.

Profit before tax increased by 79 percent to N384.44 billion from N214.80 billion, while income and deferred taxes rose by 75.7 percent to N59.56 billion.

The effective tax rate stood at approximately 15.5 percent, compared with 15.8 percent in the first half of 2025.

Net profit margin expanded sharply to 44.6 percent from 31.2 percent, meaning BUA Cement retained almost 45 kobo as profit from every naira of revenue generated during the period.

Second-quarter revenue increased by 29.2 percent to N373.95 billion, while gross profit rose by 52.5 percent to N225.13 billion.

Quarterly operating profit advanced by 51.8 percent to N191.76 billion, and profit before tax increased by 66.7 percent to N191.75 billion.

Profit after tax, however, grew at a slower rate of 48.8 percent to N148.50 billion because the quarterly tax charge nearly tripled to N43.25 billion from N15.29 billion.

The second-quarter result also reveals a sequential slowdown at the bottom line. Profit after tax declined from approximately N176.38 billion in the first quarter to N148.50 billion in the second quarter, even though revenue increased.

The decline was principally caused by a sharp increase in taxation. BUA Cement incurred about N16.31 billion in tax during the first quarter before the charge rose to N43.25 billion in the second quarter.

For investors, the strongest aspect of the result is the quality of the operating improvement. Most of the earnings growth came from a wider gross margin and stronger operating profit rather than foreign-exchange gains alone.

Lower finance costs and the N16.57 billion exchange gain provided additional support, meaning some of the growth came from factors that may not recur at the same magnitude.

BUA Cement generated approximately 91 percent of its entire 2025 profit after tax within the first six months of 2026.

Sustaining that pace will depend on pricing, sales volumes, energy costs and whether the company can preserve its unusually strong production margins.

The rise in distribution and administrative expenses, alongside the higher second-quarter tax burden, remains the principal pressure point for the second half of the year.

Cash-flow and balance-sheet disclosures will also be necessary to establish how effectively the reported profit translated into cash generation.