THUR OCT 23 2025-theGBJournal| Lafarge Africa Plc (WAPCO) reported strong Q3-25 topline growth on Wednesday despite slight revenue dip as the company forges ahead amid strong economic fundamentals, with investors eyeing cement demand progress.
For the period, Lafarge Africa Plc reported a 144.5% y/y increase in standalone EPS to N4.66, fueled by strong topline expansion (+43.3% y/y) and significant EBITDA margin accretion (+11.41ppts y/y). Consequently, 9M-25 EPS grew by 245.9% y/y to N12.90 (9M-24: NGN3.73).
Q3-25 revenue expanded by 43.3% y/y (9M-25: +62.6% y/y), reflecting growth across all major segments—cement (+42.4% y/y | 96.9% of revenue) and aggregates & concrete (+69.6% y/y | 3.1% of revenue).
Management attributed the strong topline to improved volumes and enhanced plant reliability, with capacity utilisation improving by c.7.0%. We also believe that price increases contributed meaningfully to the growth.
However, revenue declined slightly by 1.9% q/q, reflecting the typical Q3 slowdown caused by heavy rainfall affecting construction activity.
Unsurprisingly, gross margin expanded by 10.90ppts y/y to 63.8% (9M-25: +771bps y/y to 61.5%) due to slower growth in cost of sales ex-depreciation (+10.1% y/y | 9M-25: +35.6% y/y) relative to revenue.
The moderation in costs reflects a tempered 13.3% y/y increase in variable cost (73.9% of COGS) and a 0.9% y/y growth in maintenance fixed cost (13.9% of COGS). The slowdown in these cost elements is attributable to lower energy prices, increased use of alternative fuels, and relative FX stability.
As a result, EBITDA and EBIT margins improved by 11.41ppts y/y and 12.46ppts y/y to 43.6% and 40.3%, respectively, (9M-25: +986bps y/y and +11.11ppts y/y to 41.5% and 38.2%, respectively) despite a 37.5% y/y increase in OPEX (ex-depreciation).
The OPEX increase was primarily driven by higher distribution expenses (+30.4% y/y; 67.0% of OPEX), reflecting logistics-related fuel costs.
Below the operating line, WAPCO reported a net finance income of NGN7.42 billion in Q3-25, a reversal from a net finance cost of N3.47 billion in Q3-24.
This was supported by a 53.2x y/y increase in finance income to N9.84 billion and a N193.36 million net FX gain, which offset the 24.0% y/y increase in finance costs to N2.61 billion. In 9M-25, net finance income grew by 20.0x y/y to N17.02 billion.
Ultimately, profit before tax grew by 138.1% y/y to N113.55 billion, while profit after tax expanded by 144.5% y/y to N75.10 billion.
WAPCO extended the strong momentum from H1-25 into Q3-25, supported by favourable pricing dynamics, volume growth, and easing cost pressures.
While the quarter marginally underperformed Q2-25 due to seasonally weaker cement demand following the rainy season, the performance remains solid within the context of typical Q3 cyclicality.
Analysts at Cordros Research tells the G&BJournal that they we expect Lafarge Africa Plc’s earnings resilience to be sustained over the remainder of the year, underpinned by a supportive macroeconomic backdrop, continued product innovation and market penetration, operational efficiency gains from improved plant utilisation, stable energy pricing and increased alternative fuel adoption.
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