Q3 Result – Strong Profit Rebound Driven by Contract Execution, Fair Value Gains and Operational Recovery Despite Cost Headwinds

Executive Summary

Julius Berger Nigeria Plc recorded a solid financial rebound for the nine-month period ended September 30, 2025, supported by accelerated execution of key infrastructure projects, improved cash management and significant fair value gains. Despite sustained cost inflation across construction materials, labour, and financing, the Group delivered improved profitability and balance sheet resilience. Profit Before Tax rose sharply by 14% YoY to ₦29.9 billion, while Profit After Tax increased 49% YoY to ₦18.3 billion, driven by higher investment income and a reversal from prior period impairment pressures. Earnings per share rose to ₦11.28 (9M 2024: ₦7.58), underscoring strengthened profitability. Revenue declined 5% YoY to ₦540.8 billion as the Group faced delayed government disbursements and phased project completions; however, execution momentum strengthened in Q3 with revenue growth to ₦197.4 billion vs ₦161.2 billion in Q3 2024. A notable feature of the period was the strong fair value and FX-related gains recognized under Other Gains and Losses (₦45.0 billion YoY vs ₦15.9 billion), supporting earnings resilience.

Financial Highlights – Statement of Profit or Loss

₦’000 Q3 2025 Q3 2024 9M 2025 9M 2024

Revenue 197,371,444 161,230,349 540,818,203 566,705,461

Cost of Sales (177,219,596) (142,467,715) (460,663,917) (495,240,033)

Gross Profit 20,151,847 18,762,633 80,154,286 71,465,428

Other Gains/(Losses) 48,564,620 15,859,828 44,990,513 26,515,495

Administrative & Marketing Costs (26,243,297) (18,914,812) (70,304,215) (52,235,352)

Impairment Loss (27,686,567) (1,822,474) (30,621,528) (7,507,977)

Operating Profit 14,786,604 (3,284,147) 24,219,057 12,701,176

Investment Income 9,661,628 5,053,251 3,100,080 20,254,132

Net Finance Costs (1,166,986) (711,571) (3,992,992) (3,382,623)

Profit Before Tax 16,719,698 1,057,533 29,887,692 29,572,685

Tax Expense (5,575,744) (350,789) 11,635,716) (14,065,892)

Profit After Tax 11,143,954 706,744 18,251,976 15,506,793

EPS (₦) 6.91 0.39 11.28 9.54

Revenue & Operational Performance

• Revenue dipped 5% YoY to ₦540.8bn due to funding delays on public contracts and phased project billing cycles.
• Q3 revenue up +22% YoY, signalling improved execution cadence.
• Gross profit rose 12% YoY on improved cost optimization and project mix.

Key Drivers

• Higher execution on flagship road and infrastructure projects.
• Cost recovery mechanisms embedded in contracts.
• Solid FX-driven gains boosting gross profitability and fair value income.

Profitability & Margin Analysis

• Gross Margin: 14.8% (9M 2024: 12.6%) – improvement from project mix and FX gains.
• Operating Margin: 4.5% (9M 2024: 2.2%) – despite heavy impairment charges.
• Net Margin: 3.4% (9M 2024: 2.7%)

Earnings Boosted By

• Strong currency-related gains and valuation adjustments.
• Higher investment income.
• Lower taxation vs prior period.

Pressure Points

• Sharp increase in receivables impairment (₦30.6bn vs ₦7.5bn prior).
• Persistent inflation in construction inputs.
• Elevated administrative spending tied to project mobilization and logistics.

Balance Sheet Overview

₦’000 Sept-2025 Sept-2024 FY-2024

Total Assets 1,092,075,530 821,278,508 1,023,034,885

Total Equity 341,198,114 171,087,424 345,779,716

Total Borrowings 52,856,009 29,759,251 50,084,189

Cash & Bank 188,454,701 168,445,490 162,381,331

Highlights

• Asset base expanded 33% YoY, reflecting project equipment deployment and receivables growth.
• Borrowings increased 78% YoY, signalling funding of project pipelines.
• Cash position remains strong (₦188.5bn), supporting liquidity and working capital.

Key Ratios

Metric Trend

Revenue Growth -5%

Gross Margin 14.8%

PBT Growth +14%

PAT Growth +49%

EPS Growth +18%

Asset Growth +33%

Borrowings +78%

Strategic Insights

• Strong construction pipeline continued across transport, public buildings, industrial and oil & gas infrastructure.
• FX management and investment returns significantly supported earnings quality.
• Elevated receivable impairments signals working-capital stress and public sector payment cycle risks.

Strengths

• Market leadership in engineering & construction
• Strong liquidity and robust asset position
• Resilient profit growth despite sector headwinds
• Improved margin performance and execution efficiency

Weaknesses

• Receivable concentration risk in public sector
• Margin sensitivity to inflation and FX volatility
• Rising leverage to support multi-site project execution

Outlook

With Nigeria intensifying infrastructure development efforts ahead of budget cycles and PPP project acceleration, Julius Berger is positioned to sustain execution momentum. Improvement in government liquidity and continued FX stabilization will support working capital efficiency.

Cost inflation, funding delays and interest rate pressures remain notable risks, but strong balance sheet and diversified public-private project mix provide a defensive cushion.

Analyst View

“Julius Berger delivered an encouraging rebound, demonstrating operational resilience and improved earnings quality despite heavy credit loss provisioning and industry cost pressures. Strengthened liquidity, ongoing infrastructure concessions and PPP initiatives provide solid forward momentum, although disciplined receivables and debt management remains critical.”

Conclusion

Julius Berger Nigeria Plc delivered a robust 9M 2025 performance marked by improved profitability, strong operating recovery and reinforced balance sheet strength. Despite revenue softness and elevated cost provisions, the Group’s execution resilience, FX-supported financial gains and stable liquidity position underline its capacity to sustain performance as infrastructure spending intensifies.