…H1-26, PBT and PAT grew by 59.1% y/y and 57.0% y/y to N317.73 billion and N208.35 billion, respectively
…Revenue up 27.9 per cent year-on-year
WED JULY 29 2026-theGBJournal|HBM Nigeria Plc, formerly Lafarge Africa, delivered a strong second-quarter performance as robust cement demand, stronger pricing and higher finance income lifted earnings, enabling the cement producer to declare a generous interim dividend despite a challenging operating environment.
HBM Nigeria Plc reported a 31.4 per cent year-on-year increase in standalone earnings per share (EPS) to N6.85 for the second quarter ended June 2026, up from N5.22 a year earlier. The strong quarterly performance lifted first-half EPS by 56.9 per cent to N12.93, compared with N8.24 in the corresponding period of 2025.
The earnings growth was underpinned by resilient revenue expansion and a sharp rise in finance income.
Revenue increased 27.9 per cent year-on-year in the second quarter, while net finance income surged 214.9 per cent to N18.93bn, providing a significant boost to the bottom line.
Reflecting confidence in its financial position and cash generation, the board declared an interim dividend of N16.00 per share, equivalent to a dividend yield of about 4.1 per cent based on the stock’s last closing price of N389.90.
Revenue growth was broad-based across the company’s operating segments. Cement, which accounted for 97.2 per cent of turnover, expanded 27.6 per cent year-on-year, while the aggregates and concrete business recorded a stronger 39.8 per cent increase.
The mortar and power segment also posted growth of 16.8 per cent, albeit from a much smaller base.
The top-line performance reflected a combination of higher selling prices—estimated at around 16 per cent above last year’s levels—and stronger sales volumes, supported by sustained demand from public infrastructure projects and construction activity.
Revenue also rose 2.6 per cent from the previous quarter, signalling continued momentum despite a high comparative base.
Gross margin contracted by 135bps y/y to 63.0% in Q2-26 (H1-26: +497bps y/y to 62.2%), as cost of sales grew faster (+32.7% y/y) than revenue during the quarter.
The faster cost growth was driven by higher production variable costs (+35.6% y/y | 64.3% of COGS) – comprising fuel, power, raw materials and consumables – and production fixed costs (+42.0% y/y | 16.9% of COGS), alongside a 39.9% y/y rise in depreciation (9.6% of COGS).
The cost pressure largely reflects the impact of higher global oil prices during the quarter, which exerted upward pressure on fuel, power and distribution costs across the industry.
Similarly, EBITDA and EBIT margins declined by 90bps y/y and 133bps y/y to 47.4% and 43.6%, respectively (H1-26: +587bps y/y and +569bps y/y to 46.3% and 42.9%, respectively), further pressured by the uptick in OPEX.
OPEX rose by 18.4% y/y in Q2-26 (H1-26: +20.4% y/y), driven mainly by higher administrative staff costs (+62.8% y/y), advertising (+45.5% y/y), marketing staff costs (+34.4% y/y), and technical service fees (+22.2% y/y).
However, OPEX-to-sales ratio improved to 19.3% in Q2-26 (Q2-25: 20.9%) and to 19.1% in H1-26 (H1-25: 20.9%), indicating sustained operating efficiency.
Below the operating line, HBMNG reported net finance income of N18.93 billion in Q2-26, up 214.9% y/y from N6.01 billion in Q2-25.
This was driven by a 178.5% y/y increase in finance income to NGN14.86 billion, a 148.6% y/y rise in net FX gains to N4.96 billion, and a 32.9% y/y decline in finance costs to N885.07 million.
In H1-26, net finance income rose by 258.8% y/y to N26.79 billion (H1-25: N7.47 billion), primarily reflecting a 276.2% y/y surge in finance income to N27.01 billion.
Ultimately, profit before tax increased by 33.2% y/y to N168.61 billion, while profit after tax increased by 31.4% y/y to N110.39 billion, after accounting for a tax expense of N58.22 billion.
For H1-26, PBT and PAT grew by 59.1% y/y and 57.0% y/y to N317.73 billion and N208.35 billion, respectively.
The results reinforce HBM Nigeria’s ability to leverage pricing power and operational scale in an inflationary environment, while its strong finance income and sizeable interim dividend are likely to strengthen investor confidence.
Continued execution of public infrastructure projects and resilient construction demand are expected to remain key drivers of earnings through the second half of the year.
Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
