Lafarge Africa Plc has posted a stellar performance in the first half (H1) of 2025, recording a net profit of N132.7 billion — a staggering 352 per cent increase from N29.4 billion posted in the corresponding period of 2024.
According to the unaudited financial results released by the cement manufacturer, the company also recorded a 75 per cent year-on-year growth in revenue, which rose to N517 billion in H1 2025, from N295.6 billion in H1 2024. The sharp rise in earnings, analysts say, reflects not just strong sales momentum but also enhanced operational efficiency across the board.
The group’s revenue growth significantly outpaced the rise in cost of sales, which grew by 50 per cent to N221.2 billion, compared to N147.9 billion in the same period last year. Consequently, gross margin rose from 50 to 57 per cent, pointing to more efficient cost management despite inflationary pressures.
Operating profit surged to N199.7 billion, pushing operating margin to 39 per cent — a 1,700 basis point leap from 16 per cent recorded in H1 2024. Industry watchers attribute this gain to the company’s strategic shift to Compressed Natural Gas (CNG)-powered trucks through its logistics partner, ABC Haulage, a move that mitigated rising fuel and mining costs.
Distribution expenses climbed 37 per cent to N63.7 billion, up from N46.6 billion, yet operational leverage and energy cost efficiency helped Lafarge maintain strong margins.
Record-Setting Q2 Performance
The second quarter (Q2) of 2025 marked a historical high for the company, as revenue reached an all-time quarterly peak of N268.6 billion — a 70 per cent increase over the N157.8 billion posted in Q2 2024.
Despite a 61 per cent rise in operating expenses to N56.3 billion, profitability remained robust. A major contributor was the steep drop in finance costs, which declined by 89 per cent to N1.3 billion from N12.1 billion in the same quarter last year. This propelled after-tax profit for Q2 to N84 billion, a 248 per cent surge from N24.2 billion.
Lafarge Africa’s robust performance is also reflected in its balance sheet. As of June 2025, total assets stood at N1.03 trillion, supported by capital expenditure of N28.9 billion which lifted non-current assets to N619.2 billion, up from N576.5 billion at the start of the year.
While inventories rose 11 per cent to N115.8 billion, cash reserves dipped 12 per cent to N210 billion — largely due to debt repayments and dividend payouts. Nevertheless, the group’s cash generation remained strong.
Liquidity Profile Strengthens
The company repaid contractual obligations totalling N81.6 billion in H1, reducing contract liabilities to N130.8 billion from N212.5 billion. This bolstered Lafarge’s current ratio to 1.04 — outpacing Dangote Cement (0.74) and BUA Cement (0.93).
Notably, Lafarge did not incur new borrowings during the period. Instead, it paid down N1.7 billion in loans and disbursed N83.8 billion in dividends, yet ended the half with a cash balance of N210 billion.
Its cash ratio stood at 0.53, significantly higher than Dangote Cement’s 0.11 and BUA Cement’s 0.33 — an indication of superior short-term liquidity.
A standout metric was Lafarge’s net operating cash flow, which jumped 340 per cent to N82.6 billion from N18.8 billion in the same period last year. After capital expenditure, the firm closed the half-year with a free cash flow of N53.7 billion — a turnaround from a negative N9.03 billion in H1 2024. Though still behind Dangote Cement’s N707.9 billion, the improvement is a testament to strengthened financial discipline.
Lafarge Africa’s H1 2025 results paint a picture of a company consolidating its operational gains while maintaining prudent financial strategies. The firm’s refusal to over-leverage amid a volatile economy, coupled with strategic fuel choices and cost optimisation, has translated into strong dividends and industry-leading liquidity.
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