Nigeria’s three largest cement manufacturers, Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc, have reported significant increases in sales revenue, which surged to over N2.4 trillion by June 2024.
However, these companies are simultaneously experiencing dwindling profits.
In the first half of 2024, the top cement firms saw a 76.66 percent surge in sales revenue year-on-year, compared to N1.36 trillion posted in June 2023, according to analysis by our source. This jump was primarily driven by a series of price hikes, with the cost of a 50-kilogram bag of cement rising to between N9,000 and N13,000 from about N6,400.
The Minister of Works, Dave Umahi, attributed the price surge to a 42 percent increase in gas costs and rising import duty exchange rates, explaining, “If the cost of their gas rose by 42 percent and the import duty exchange rate has also gone up, it is expected that the cost of cement would go up.”
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Despite the increased revenue, the cumulative profit declared by the three manufacturers declined by 9.54 percent, from N277.69 billion in June 2023 to N253.5 billion in the first half of 2024.
Dangote Cement led the revenue surge, earning N1.76 trillion, while BUA Cement and Lafarge declared N363.9 billion and N295.57 billion, respectively. However, only Dangote Cement saw a rise in profits year-on-year, while BUA and Lafarge posted declines.
Dangote Cement’s revenue surged from N950.8 billion in the first half of 2023 to N1.76 trillion in June 2024, an 85 percent increase. The company, controlled by Aliko Dangote, posted a profit after tax of N189.9 billion, up 6.3 percent from N178.6 billion in June 2023, accounting for 72.7 percent of the sales revenue generated by the three companies.
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BUA Cement’s revenue rose 64.6 percent year-on-year, from N221 billion to N363.94 billion in the first half of 2024. However, its profit after tax fell dramatically by 85.7 percent, from N63.6 billion in June 2023 to N34.25 billion in the first half of 2024, due to a surge in the cost of sales and a significant foreign exchange loss.
Lafarge Africa’s revenue increased by 49.5 percent, from N197.68 billion in June 2023 to N295.57 billion in June 2024. However, the company’s profit after tax dropped by 17.3 percent, from N35.47 billion in June 2023 to N29.35 billion in June 2024, which the company attributed to foreign exchange losses.