Lafarge Africa Plc Q3 – Strong Momentum Sustained into Q3 2025 as Profit Soars 246% YoY

Lafarge Africa Plc (Lafarge) reported an outstanding Q3 and 9M 2025 performance, sustaining its growth trajectory with significant year-on-year improvements across all key profitability metrics. The Group delivered robust topline expansion and margin improvement, underscoring its operational discipline, improved plant reliability, and cost optimization. Profit After Tax (PAT) surged 246% YoY in 9M 2025 to ₦207.8 billion, supported by strong volume growth and the launch of new low-carbon product lines such as ECOCrete and ECOPlanet.

Financial Highlights | ₦’million | Q3 2025 | Q3 2024 | % Δ YoY | 9M 2025 | 9M 2024 | % Δ YoY

Revenue | 263,509 | 183,920 | +43% | 780,486 | 479,496 | +63%

Gross Profit | 160,357 | 90,129 | +78% | 456,125 | 237,766 | +92%

Operating Profit | 106,137 | 51,169 | +107% | 298,408 | 130,077 | +129%

Profit Before Tax | 113,554 | 47,697 | +138% | 313,290 | 94,326 | +232%

Profit After Tax | 75,103 | 30,726 | +144% | 207,780 | 60,076 | +246%

EPS (₦) | 4.66 | 1.91 | +144% | 12.90 | 3.73 | +246%

Operating Margin | 40% | 28% | +12pp | 38% | 27% | +11pp

Revenue Growth

• Revenue rose 43% YoY in Q3 2025 to ₦263.5 billion (Q3 2024: ₦183.9 billion).
• For the 9-month period, topline expanded by 63% YoY to ₦780.5 billion, supported by increased cement volumes, improved pricing, and higher contributions from its green product lines — ECOPlanet and ECOCrete.
• The strong revenue growth also reflects improved plant reliability and expanded market reach across key construction corridors in Nigeria.

Profitability and Margins

• Gross Profit climbed 78% YoY in Q3 to ₦160.4 billion, with gross margin improving significantly due to a better sales mix and lower energy costs from optimized fuel usage.
• Operating Profit more than doubled (+107% YoY) to ₦106.1 billion in Q3 and grew 129% YoY to ₦298.4 billion for 9M 2025. This reflects strong cost discipline, enhanced operational leverage, and sustained efficiency gains across plants.
• Operating Margin widened by 12 percentage points to 40% in Q3 (vs 28% in Q3 2024) and by 11 pp to 38% for the 9-month period, highlighting Lafarge’s superior cost control and pricing power.

Profit Before Tax (PBT) and Profit After Tax (PAT)

• PBT surged 138% YoY to ₦113.6 billion in Q3, while 9M 2025 PBT jumped 232% YoY to ₦313.3 billion.
• PAT mirrored this trend, advancing 144% YoY to ₦75.1 billion for Q3 and 246% YoY to ₦207.8 billion for the 9-month period — a record performance in the company’s recent history.
• The exceptional bottom-line growth was driven by margin expansion, improved plant uptime, and increased finance income on cash balances amid elevated interest rates.

Earnings Per Share (EPS)

• EPS rose sharply to ₦4.66 in Q3 2025 (vs ₦1.91 in Q3 2024), representing a 144% YoY increase.
• For the 9-month period, EPS stood at ₦12.90, up 246% YoY, reflecting higher retained earnings and improved shareholder value creation.

Commentary

Lafarge Africa Plc delivered another outstanding quarter, with results underscoring sustained operational efficiency, volume growth, and cost optimization. Across all key performance indicators, the company recorded strong double- and triple-digit year-on-year (YoY) improvements, reflecting robust demand recovery and disciplined execution of its growth strategy.

Balance Sheet Overview

₦’million | 30 Sept 2025 | 31 Dec 2024 | % Change

Total Assets | 1,026,607 | 990,510 | +3.6%

Total Liabilities | 397,313 | 485,869 | -18.2%

Total Equity | 629,294 | 504,641 | +24.7%

Retained Earnings | 440,221 | 315,567 | +39.5%

Interpretation:

• Total Assets grew by 3.6%, primarily reflecting reinvestment of operating cash flows and increased working capital efficiency.
• Liabilities declined sharply by 18.2%, suggesting deleveraging, possibly through repayment of short-term borrowings or reduced trade payables.
• Equity expanded 24.7%, driven by higher retained earnings (+39.5%), showing that profit growth is translating directly into shareholder value.
• The increase in retained earnings underscores strong internal capital generation, which enhances future dividend-paying capacity and reinvestment potential.

Comment: The company strengthened its balance sheet through higher retained earnings, deleveraging (loan balances reduced by ~55%), and improved working capital efficiency. Current liabilities declined notably, reflecting a stronger liquidity position and improved cash conversion.

Key Ratios | Ratio | 9M 2025 | 9M 2024 | Change

Gross Margin | 58% | 50% | +8pp

Operating Margin | 38% | 27% | +11pp

PBT Margin | 40% | 20% | +20pp

ROE | 46% | 24% | +22pp

ROA | 20% | 9% | +11pp

Debt-to-Equity | 0.63x | 0.96x | -0.33x

Interpretation:

• Gross Margin (58%) — expanded by 800 basis points, reflecting efficient cost control, stable energy prices, and improved plant utilization.
• Operating Margin (38%) — rose 11 percentage points due to tighter SG&A discipline and operating leverage from higher volumes.
• PBT Margin (40%) — doubled year-on-year, driven by margin expansion and a 24x surge in finance income.
• ROE (46%) — outstanding return on equity highlights effective capital deployment and strong profit retention.
• ROA (20%) — more than doubled YoY, emphasizing improved asset efficiency and earnings quality.
• Debt-to-Equity (0.63x) — declined from 0.96x, confirming a more conservative leverage structure and improved financial resilience.

Strategic Insights

• The improvement in ROE and ROA demonstrates the company’s success in converting asset base into profit more efficiently, an indicator of superior management performance.
• The lower leverage ratio (0.63x) positions Lafarge to withstand macroeconomic volatility (interest rate hikes, naira depreciation) while maintaining funding flexibility for future expansions.
• Enhanced margins and higher retained earnings signal potential for dividend upside and sustainable growth without excessive external financing.
• With debt reduction and higher equity capitalization, Lafarge’s cost of capital is likely to fall, further boosting valuation attractiveness.

Commentary

“Lafarge Africa’s Q3 2025 balance sheet shows a decisive shift toward stronger capitalization and efficiency. The company’s deleveraging and high retained earnings growth enhance its liquidity profile, while the expanded margins confirm robust cost discipline. With ROE at 46% and debt-to-equity below 0.7x, Lafarge is now among the most financially sound cement producers in the Nigerian market.”

Strength

·       Sustained top-line and bottom-line growth

·       Strong operational efficiency and cost discipline

·       Strengthened balance sheet and reduced leverage

·       Leadership in low-carbon product innovation

·       Attractive valuation relative to peers

Risks

• Inflationary pressures and FX volatility impacting input costs
• Potential competitive pricing from peers in key regions

Operational & Strategic Highlights

• Volume & Market Share Growth: Cement volumes rose across all regions, supported by enhanced plant reliability and improved distribution efficiency.
• Margin Expansion: Operating margin rose to 40% in Q3 (vs. 28% in Q3 2024) due to disciplined cost control, optimized energy usage, and economies of scale.
• Product Innovation: Launch of ECOCrete—Nigeria’s first low-carbon ready-mix concrete—represents a key milestone in Lafarge’s sustainability journey, reducing carbon emissions by at least 20% while maintaining strength and durability.
• Green Portfolio Expansion: ECOPlanet cement now accounts for over 50% of Western market cement sales, underscoring Lafarge’s success in pivoting towards sustainable construction materials.
• Finance Income Surge: 9M finance income jumped to ₦20.3 billion from ₦0.8 billion, reflecting higher yields on short-term deposits amid elevated interest rate environments.

 Analyst View

Lafarge Africa’s Q3 2025 results underscore a robust earnings recovery and strategic execution, positioning the company favorably within the Nigerian cement sector. The combination of product diversification (ECOCrete/ECOPlanet), margin expansion, and strong free cash flow supports an optimistic outlook into FY2026.

Conclusion: Lafarge Africa Plc continues to demonstrate exceptional execution and financial discipline. With sustained growth momentum, a reinforced balance sheet, and an expanding green product line, the company is well-positioned to deliver long-term shareholder value.