…BUA, Lafarge, Dangote lead as sector grows 10.7%
By Charles Ebi
Nigeria’s top cement producers- Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc collectively spent ₦1.37trn on production in the first half of 2025, marking a 10.76% rise from ₦1.24trn in the corresponding period of 2024.
The sharp escalation in costs, driven by stubborn inflation, persistent Naira depreciation, and broad macroeconomic headwinds, placed significant pressure on margins despite record-breaking revenue and profit performances across the industry.
An analysis of the companies’ unaudited half-year financial statements by AljazirahNigeria shows that the cost of sales, which includes expenses related to raw materials, energy, direct labour, and production overheads, consumed 43.21% of the sector’s combined revenue of ₦3.17trn in H1 2025.
This was slightly lower in proportional terms compared to 51.24% of ₦2.42trn in H1 2024, reflecting improved cost efficiency even as absolute production costs surged.
Industry players continue to contend with multiple cost drivers. Rising global energy prices, higher freight charges, and elevated costs of imported production inputs, most of which are priced in foreign currencies, have been compounded by Nigeria’s domestic policy shifts, including the removal of fuel subsidies and the unification of the foreign exchange market.
These factors have tightened production budgets and forced companies to deploy aggressive cost management strategies.
Despite the difficult operating environment, the three cement giants delivered strong top-line growth, underpinned by pricing adjustments, operational efficiencies, and steady demand from both the domestic and export markets.
Dangote Cement Plc maintained its industry dominance, posting a 17.7% rise in group revenue to ₦2.07trn, from ₦1.76trn in the first half of 2024. Profit after tax soared 174.1% to ₦520.46bn, while basic earnings per share more than doubled to ₦30.74 from ₦11.26. Cost of sales rose modestly by 2.43% to ₦853.56bn, representing 41.21% of total revenue.
This contained growth in costs, coupled with higher selling prices, drove gross profit up to ₦1.22tr from ₦926.78bn. Operating cash flows also strengthened markedly, with ₦810.98bn generated in H1 2025 compared to ₦551.60bn a year earlier.
Administrative expenses and selling and distribution costs rose in line with increased operational activity, reaching ₦124.28bn and ₦321.39bn, respectively.
BUA Cement Plc recorded the fastest revenue growth in the sector, climbing 59% to ₦580.3bn from ₦363.9bn in H1 2024. Profit after tax skyrocketed 428% to ₦180.9bn from ₦34.3bn, reflecting improved cost management and higher price realisations.
Gross profit rose by 161.4% to ₦285.8bn despite cost of sales increasing 15.67% to ₦294.55bn, which represented the highest cost-to-revenue ratio among the three companies at 50.76%.
Management credited the strong performance to operational resilience, a stable exchange rate in recent months, and efficiency gains in energy usage.
According to Chief Financial Officer Chikezie Ajaero, the company’s gross and EBITDA margins improved to 49.2% and 46.2%, respectively, from 30 per cent and 26.2% in H1 2024.
Lafarge Africa Plc delivered a similarly strong performance, with revenue jumping 75% to ₦517bn from ₦295.6bn a year earlier. Profit after tax increased more than fourfold to ₦132.7bn from ₦29.4bn.
Cost of sales rose to ₦221.2bn from ₦147.9bn, accounting for 42.79% of revenue, while gross profit more than doubled to ₦295.8bn.
Operating profit surged 144% to ₦192.3bn, reflecting disciplined cost control and efficiency gains.
Chief Executive Officer Lolu Alade-Akinyemi said the company remains committed to its “Accelerating Green Growth” strategy, focusing on innovative building solutions and sustainability initiatives despite economic headwinds.
Executives across the sector underscored the importance of maintaining strict cost discipline while exploring growth opportunities.
Dangote Cement’s Arvind Pathak said strategic investments, disciplined execution, and export growth — including an 18.2% rise in clinker shipments to Ghana and Cameroon were central to the company’s performance.
BUA Cement’s Yusuf Binji described the results as evidence of the company’s continued growth momentum and long-term value proposition for shareholders.
Market analysts believe that while the cement industry has demonstrated strong resilience in navigating rising costs, inflationary and currency pressures are likely to persist through the remainder of the year.
Sustained investment in efficiency-enhancing technology, energy diversification, and export market expansion is expected to be critical in protecting margins and ensuring robust shareholder returns.
