BUA Cement Plc kicked off 2025 with an eye-popping performance, posting a profit before tax of N99.74 billion in its unaudited results for the first quarter ended March 31, 2025. That figure marks a staggering 368.58 percent jump compared to the same period last year, driven by a mix of strong revenue, improved margins, and reduced foreign exchange losses.
Equally remarkable, the company’s net income soared by 351.45 percent year-on-year to N81.12 billion — more than it earned in the entire 2024 financial year.
The cement giant reported revenue of N290.82 billion in the first three months of the year, representing an 80.49 percent increase from Q1 2024. Cost of sales climbed at a much slower pace, rising 31.25 percent to N152.37 billion, allowing gross profit to more than triple to N138.45 billion. The sharp divergence between revenue growth and production costs translated to a gross margin of 47.61 percent, over 70 percent higher than last year — a sign of improved operational efficiency and cost control.
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Operating profit came in at N119.03 billion, marking a 255.57 percent surge. Despite a steep rise in selling and distribution expenses to N14.41 billion, up 106.46 percent, the company still managed to grow its operating profit margin to 40.44 percent from 20.47 percent a year earlier.
The result, analysts say, is a clear sign of operational leverage in play, where revenue is rising faster than costs, thereby amplifying profits.
But perhaps the most significant turnaround came in the form of foreign exchange management. In Q1 2024, BUA Cement suffered an FX loss of N10.06 billion as a result of exchange rate fluctuations. That figure was slashed to just N837 million in Q1 2025, helping offset the steep jump in net finance costs, which ballooned by 878.69 percent to N17.79 billion.
The drop in FX losses, combined with strong operating income, gave a major lift to the bottom line.
Balance Sheet Tells a Mixed Story
Despite the blockbuster profit, BUA Cement’s balance sheet showed mixed signals. Total assets edged up slightly by 0.81 percent to N1.583 trillion, suggesting limited expansion in asset base so far this year.
However, the company’s total debt spiked sharply by over 382 percent within the three-month period to N447.62 billion. This sharp rise in borrowings could be linked to recent capital projects or efforts to shore up liquidity in response to macroeconomic uncertainties.
Yet, shareholders’ equity grew robustly to N469.67 billion, providing a buffer against the spike in liabilities. Consequently, the company’s leverage ratio, measured as total assets divided by equity, improved to 3.37. This indicates a healthier balance in how the company is funding its operations, leaning less heavily on debt per unit of asset.
Cash and cash equivalents also showed notable improvement, growing 63.98 percent to N138.97 billion, reinforcing the company’s liquidity position.
Earnings Per Share Jumps, But Market Unimpressed
Basic earnings per share (EPS) for the period stood at N2.39, a 346.41 percent increase from the same period in 2024. It’s a strong signal of value for shareholders, especially against a challenging macroeconomic backdrop.
However, despite the stellar financial performance, investors appear to be holding back. BUA Cement, the seventh most valuable firm on the Nigerian Exchange with a market capitalization of N2.83 trillion, has seen its share price fall by 10 percent since the start of the year. As of the close of trading on April 24, 2025, the stock stood at N83.70.
The subdued investor sentiment could be linked to wider market uncertainties, cautious outlooks on the cement sector, or concerns about rising debt, despite the impressive numbers.
What’s Driving This Turnaround?
The extraordinary Q1 showing raises questions about what’s really driving the turnaround. While the numbers clearly reflect an uptick in revenue, likely from increased cement prices or sales volume, they also point to a disciplined control over costs and a better grip on FX exposures.
For a company that closed 2024 with a full-year net profit lower than what it made in just the first quarter of 2025, the performance marks a dramatic shift in trajectory.
Still, analysts believe the steep rise in borrowings within a short period could become a concern if earnings momentum slows or interest rates rise. Investors may also be waiting to see if this performance is sustainable or a one-off boost from favorable currency movements and improved margins.