Julius Berger Nigeria Plc reported first-quarter 2025 pre-tax profit of ₦5.9 billion, marking a steep 64.68% decline from ₦16.7 billion in Q1 2024. Despite a robust 62.80% revenue growth to ₦180.5 billion—driven primarily by its core civil engineering operations—the construction giant faced a squeeze on margins due to rising costs and a sharp reversal in foreign exchange positions.
The revenue breakdown highlights sustained operational strength:
- Civil works: ₦125.1 billion
- Building works: ₦30.2 billion
- Services: ₦25.2 billion
However, the benefit of this strong topline was offset by a 70.29% jump in cost of sales to ₦153.1 billion. As a result, gross profit came in at ₦27.4 billion, a 30.69% year-on-year increase—positive, yet insufficient to absorb the sharp rise in operating and FX-related expenses.
Key Highlights:
- Revenue: ₦180.5bn (+62.80% YoY)
- Cost of Sales: ₦153.1bn (+70.29%)
- Gross Profit: ₦27.4bn (+30.69%)
- Administrative Expenses: ₦22.6bn (+46.42%)
- Operating Profit: ₦3.1bn (–76.53%)
- Pre-tax Profit: ₦5.9bn (–64.68%)
- FX Loss: ₦1.8bn (vs. ₦9.4bn gain in Q1 2024)
- Other Gains: ₦75.2m (–99.22%)
- Investment Income: ₦3.7bn (–17.52%)
- Total Assets: ₦1.05tn (+37.31%)
- Retained Earnings: ₦62.6bn (+6.21%)
The company’s foreign exchange loss of ₦1.8 billion—a reversal from a ₦9.4 billion gain last year—significantly impacted other income, causing ‘Other Gains’ to collapse by 99.22%. Operating profit fell sharply to ₦3.1 billion (–76.53%), while investment income declined by 17.52%.
Despite the income pressures, Julius Berger’s balance sheet remains solid. Total assets climbed 37.31% to ₦1.05 trillion, while retained earnings grew 6.21% to ₦62.6 billion, supporting long-term shareholder value. However, the share price closed at ₦137.00 on April 30, 2025, reflecting a year-to-date decline of 11.76%.
Conclusion:
Julius Berger delivered an impressive revenue surge, affirming its execution capacity and project pipeline strength. However, profitability was significantly undermined by inflationary pressures, FX volatility, and operational cost escalation. While the company’s financial position remains fundamentally sound, its earnings vulnerability in a volatile macroeconomic environment raises concerns about margin sustainability.
Investors may remain cautious until clearer visibility emerges on cost stabilization, FX management, and project execution efficiency.
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