How BUA Cement Built N176bn Profit in Q1
BUA Cement Plc has reported a staggering 120 per cent increase in after-tax profit for the first quarter of 2026. Through aggressive cost-cutting and improved financial income, the company converted nearly half of its N355 billion revenue into pure profit.
All-round cost savings enabled BUA Cement Plc to multiply after-tax profit more than twice to over N176 billion in the first quarter, almost one-half of the company’s N356 billion full-year profit in 2025.
The interim financial report of the cement-producing company for the first quarter ended March 2026 shows substantial cost savings across the top and bottom lines, elevating margins to new highs.
Net profit margin advanced from below 28 per cent in the same period in 2025 and from 30 per cent at the end of last year to 49.7 per cent at the close of the first quarter.
How the company lifted margins that high to convert about one-half of the naira of revenue into profit is the highlight of its earnings story in the first quarter.
While sales revenue increased by 22 per cent year-on-year to roughly N355 billion in the first quarter, after tax profit jumped by 120 per cent to close in excess of N176 billion over the same period. The difference is the much-enhanced ability to convert revenue into profit.
The biggest cost-saving line is production expenses, which only inched up from N152 billion to N153 billion during the period, despite the 22 per cent rise in sales revenue. That effectively lowered the average cost of producing the naira of sales from 52 kobo to 43 kobo.
Driven by significantly improved gross margins, gross profit grew 45.5 per cent to nearly N202 billion, outpacing sales revenue growth by more than two-fold. Reduced energy consumption and operation/maintenance costs offset a substantial increase in material costs.
Operating expenses also slowed down, and cost savings from here again improved margins that powered a stronger growth in operating profit.
Selling and distribution expenses only edged up from N14.4 billion to N15.4 billion year-on-year, and administrative costs increased by 20 per cent to a little over N7 billion.
With further cost savings from operations, operating profit rose by 50.8 per cent year-on-year to N179.5 billion at the end of the first quarter.
The third level cost savings for BUA Cement came from financing operations, where a combination of a massive increase in finance income and a big drop in finance expenses made a big difference in the company’s earnings story.
Finance income multiplied more than seven times year-on-year to N11.3 billion during the period – more than 66 per cent of the N17 billion finance income the company posted for the 2025 full year.
At the same time, finance expenses fell by 42.4 per cent year-on-year to N11 billion, reflecting a cut down in short-term borrowings from N156 billion at the end of last year to N127 billion at the end of the first quarter. Capitalisation of N2.4 billion interest on qualifying assets also contributed to the slash of finance expenses.
A significant increase in finance income, coupled with a substantial reduction in finance expenses, led to a shift from a net finance cost of N17.8 billion in the prior year to a net finance income of N161 million at the end of the first quarter.
This was boosted by a net foreign exchange gain of over N13 billion, a significant improvement from the N837 million net loss in the same quarter of 2025. However, the company’s year-end results reflected net foreign exchange losses of N9.7 billion.
Despite the reduction in short-term borrowings, the company’s balance sheet debts remain huge in the region of N502 billion at the close of the first quarter against N527 billion at the end of the 2025 financial year.
The cost savings from financing operations again raised margins, leading to an increase of 93 per cent in pre-tax profit to N192.7 billion at the end of the first quarter.
The fourth level of cost saving by the company came from a reduction in income tax expenses over the review period. First, there is a complete absence of minimum tax in the first quarter in respect of which the company paid over N665 million in the same period last year.
Also, income tax expense dropped from N18.6 billion to N16.3 billion over the period to complete an all-round cost saving that boosted BUA Cement’s profit capacity in the first quarter.
In Q1, earnings per share reached N5.20, up from N2.39 in Q1 2025. The full year closed with earnings per share of N10.51, and a cash dividend of N10 per share is being paid to shareholders.
