Nigeria’s leading cement manufacturers—Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc—posted significant profit growth in 2024 despite economic challenges, largely driven by price adjustments and increased demand.
An analysis of the companies’ unaudited financial statements revealed that their combined after-tax profit rose by 17.6 percent to N677.48 billion in 2024, compared to N576 billion in 2023. This growth was fueled by a sharp rise in cement prices, implemented to offset rising operational costs and inflationary pressures.
Dangote Cement led the sector with a N503.4 billion profit, followed by Lafarge Africa at N100.1 billion and BUA Cement at N73 billion. The three companies collectively saw a 68 percent increase in revenue, climbing to N5.15 trillion from N3.06 trillion in 2023.
Price Adjustments and Demand Drive Revenue Growth
Arvind Pathak, CEO of Dangote Cement, attributed the company’s strong performance to a mix of increased sales volume and price adjustments.
“Despite macroeconomic challenges both globally and domestically, we remained dedicated to innovation and value creation, which resulted in strong returns for stakeholders. Our group revenue grew by 62.2 percent,” Pathak stated in the company’s earnings report.
Analysts predict further revenue growth in the second half of 2024, driven by increased public sector demand and government-backed infrastructure projects. However, they cautioned that rising energy prices, FX losses, and higher haulage costs could pressure profit margins.
“The outlook for the cement industry remains positive, given the Federal Government’s capital expenditure drive, which includes a N10 trillion allocation in the 2024 budget and an additional N6.2 trillion supplementary budget,” analysts noted.
Performance Breakdown of Leading Cement Manufacturers
Dangote Cement
Dangote Cement recorded a 62.7 percent revenue increase, reaching N3.58 trillion in 2024, up from N2.2 trillion in 2023.
This was driven by strategic price adjustments and sustained demand. However, production costs rose to N1.64 trillion, affecting overall profit margins.
The company’s stock price appreciated by 50 percent in 2024, closing at N478.80 per share on December 27, up from N319.80 at the start of the year.
This boosted Dangote Cement’s market capitalization to N8.07 trillion, reflecting a N2.69 trillion gain.
Despite the cost pressures, Dangote Cement’s Board of Directors proposed a N30.00 dividend per share, maintaining the same payout as in 2023.
BUA Cement
BUA Cement also recorded strong revenue growth, with earnings surging by 90.8 percent to N876 billion, compared to N459 billion in 2023.
Its after-tax profit rose by 6.4 percent to N73.9 billion, up from N69.4 billion in 2023. The Board has recommended a N2.05 dividend per share for 2024, slightly higher than N2.00 in 2023.
Unlike its competitors, BUA Cement’s stock price fell by 8.8 percent in 2024, closing at N93.00 per share, down from N102 at the start of the year.
Lafarge Africa
Lafarge Africa reported the strongest profit growth among the three, with after-tax earnings nearly doubling to N100.1 billion, up from N51.1 billion in 2023.
Revenue increased by 71.8 percent, reaching N696.7 billion, compared to N405.5 billion in the previous year. Lafarge’s stock price saw a 120.1 percent jump, closing at N69.34 per share, up from N31.50.
The company proposed a 120 kobo dividend for the financial year ended December 31, 2024.
Cement Prices and Market Trends
The Central Bank of Nigeria’s Purchasing Managers Index (PMI) for cement producers rose to 60 points in January 2024, marking the highest reading since October 2023. A PMI above 50.0 indicates industry expansion.
However, cement prices continued to climb, reaching N8,500 per 50kg bag in November 2024, up from N7,500 earlier in the year. The cost had nearly doubled from N4,500 at the beginning of 2023.
Industry experts attribute the frequent price hikes to factors such as high exchange rates, energy costs, and a lack of competition, with Dangote, BUA, and Lafarge controlling 95 percent of Nigeria’s cement market.
Estate manager Sebastine Ovie warned that rising cement prices could disrupt construction projects and lead to cost-cutting measures that might compromise building safety.
“The immediate impact of these price increases is that project timelines are disrupted, causing safety concerns as contractors face pressure to cut corners,” Ovie noted.
Despite these challenges, Nigeria’s cement industry remains positioned for continued growth, supported by strong demand and government infrastructure spending.
