Lafarge Africa Plc H1 2025 Result: Strong Earnings Push PAT up +352%

Lafarge Africa Plc’s H1 2025 saw a strong earnings performance and an operating recovery in H1 2025 following a challenging 2024 financial year affected by FX losses and considerable inflationary pressures. The group reported a substantial +74.91% year-on-year (Y-o-Y) rise in revenue to N516.98bn, primarily driven by strong cement sales, which accounted for 98% of total revenue. The cost of sales rose at a slower pace (+49.53%), enabling gross profit to double to N295.77 bn. These strong earnings also resulted in an increase in cash from operating activities, contributing to a 128.36% growth in cash and cash equivalents, despite active investments and dividend payments.

The activities of Lafarge’s total assets grew by +39.70% to over N1,026.96bn, supported by growing inventories, trade receivables, and cash holdings. Shareholders’ equity rose by +28.07%, driven by a +48.94% rise in retained earnings, signalling sustainable value creation. The financial ratios further validate this improvement, with the return on equity (ROE) climbing to 23.88% and the return on assets (ROA) to 12.92%. At the same time, leverage remained minimal, reflecting a strong and low-risk capital structure. Although liquidity metrics saw slight declines, they remained within a comfortable range. The clinker maker’s valuation metrics indicated a potential upside, while the share price rallied by over 66% during the review period, underscoring growing investor optimism. 

Key Highlights in H1 2024

• Lafarge Africa’s revenue ticked up by +74.91% from N295.58bn in H1 2024 to N516.98bn in H1 2025.
• Cost of sales (Production) rose by +49.53% to N221.21bn in H1 2025 from N147.94bn in H1 2024
• Gross profit increased by +100.34% from N147.64bn in H1 2024 to N295.77bn in H1 2025.
• Administrative expenses grew by +83.37% to N30.73bn in H1 2025 from N16.76bn in H1 2024.
• Finance income rose by +895.93% from N1.03bn on H1 2024 to N10.25bn in H1 2025, while the finance cost dipped by -91.65% to N2.78bn in H1 2025 from N33.31bn in H1 2024.
• Profit-before-tax increased by +328.35% to N199.74bn in H1 2025 from N46.63bn in H1 2024, and profit-after-tax +352.05% to N132.68bn in H1 2025.
• Total assets grew by +39.70% from N735.11bn in H1 2024 to N1.026.96bn in H1 2025.
• Inventories rose by +37.73% to N115.77bn in H1 2025 from N84.06bn
• Shareholders’ equity increased by +28.07% from N433.79bn in H1 2024 to N555.56bn in H1 2025, fuelled by a +48.94% growth in retained earnings from N244.72bn in H1 2024 to N364.48bn in H1 2025.

Key Highlights in Q2 2024

• Lafarge Africa’s top-line earnings rose by +70.20% to N268.63bn in Q2 2025 from N157.80bn in Q2 2024. 
• Cost of sales increased by +26.40% to N95.83bn in Q2 2025 from N75.81bn in Q2 2024, resulting in a growth of +110.70% in gross profit from N81.99bn in Q1 2024 to N172.79bn in Q2 2025. 
• The administrative cost grew by +109.90% from N8.48bn in Q2 2024 to N17.80bn in Q2 2025.
• The net finance income fell by -161.40% to N6.01bn in Q2 2025, mainly due to the negative net finance income of N9.78bn recorded in Q2 2024. 
• Profit-before-tax rose by +233.90% to N126.62% in Q2 2025 from N37.92bn in Q2 2024, while the profit-after-tax increased by +247.90% from N24.16bn in Q2 2024 to N84.03bn in Q2 2025.

Revenue 

A five-year review of Lafarge Africa’s half-year (H1) revenues show that revenue has consistently risen, with H1 2025 seeing the highest growth of +74.91% to N516.98bn. Cement, the main contributor to Lafarge Africa Plc’s revenue, accounted for 98% of the growth, while aggregates and other products contributed the remaining 2%. (see chart 1 below). 

Chart 1:

Profitability

Despite the rise in Lafarge Africa’s costs, its profit before tax (PBT) and profit after tax (PAT) rose by +328.35% and +352.05% to N199.74bn and N132.68bn, respectively. The Central Bank’s (CBN’s) intervention in the FX market has mitigated the impact of revaluation losses recorded in H1 2024, resulting in a decrease in finance costs by -91.65% to N2.78bn in H1 2025 from N33.31bn in H1 2024. (see chart 2 below)

Chart 2:

Cashflow

The increase in the PBT and PAT of Lafarge Africa in H1 2025 resulted in a +340.18% rise in cash flows from operating activities, from N18.76bn in H1 2024 to N82.58bn in H1 2025. The acquisition of property, plant, and equipment, as well as the payment of dividends and repayment of loans, under the investing and financing activities, did not negatively impact cash and cash equivalents, which grew by +128.36% to settle at N207.44bn in H1 2025, indicating a robust liquidity position (see Table 1 below)

Table 1

Financial Position

The liquidity position of Lafarge Africa improved in H1 2025 compared to H1 2024. The total assets grew by +39.70% from N735.11bn in H1 2024 to N1,026.96bn in H1 2025. The growth in assets was driven by increases in property, plant, and equipment, as well as inventories, trade receivables, and cash and cash equivalents.  Borrowings increased by +5.31% to N1.74bn in H1 2025 from N1.65bn in H1 2024. Retained earnings rose by +48.94% driving shareholders’ equity up to N553.56bn in H1 2025 from N433.79bn in H1 2024. Inventories rose by +37.74% to N115.77bn, mainly due to spare parts, semi-finished and finished goods, indicating slow demand for products (see Table 2 below)

Table 2:

Valuation

Lafarge Africa’s share price rally in H1 2025 resulted in the price-to-book (P/B) ratio rising to 2.5x, indicating that it is valued higher than its book value. The price-to-earnings ratio (P/E) dipped to 10.58x in H1 2025 from 18.71x in H1 2024, signalling the possibility of being undervalued. The market capitalisation rose to N1,404.60bn in H1 2025 from N548.47 in H1 2024 (see Table 3 below). 

Table 3:

Financial Ratio

Lafarge’s financial performance in H1 2025 reflects significant deleveraging, with the debt-to-equity ratio slipping from 0.004x in H1 2024 to 0.003x in H1 2025, and the debt-to-assets ratio remaining steady at 0.002x in H1 2025, indicating a low-risk balance sheet. Despite a slight decline in liquidity, current and acid-test ratios falling to 1.04x and 0.74x in H1 2025 respectively, the group delivered strong profitability, with ROE rising to 23.88%, and ROA to 12.92% in H1 2025, respectively. Overall, Lafarge appears more operationally efficient, financially stable, and well-positioned for future growth despite tighter short-term liquidity (see Table 4 below).

Table 4:

Share Price Movement

Lafarge Africa’s share price showed a strong upward movement in H1 2025, rising from N69.75 on January 2, 2025, to N116.00 by July 21, 2025. The share price showed relative stability in H1 2025, with brief spikes in February, followed by a period of consolidation through March and April. A notable breakout occurred in mid-May, and momentum accelerated in July to settle at N116.00, reflecting growing investor confidence likely driven by the company’s improving profitability, low debt levels, and strong H1 2025 financial performance. The sustained rally suggests positive market sentiment and possibly increased institutional interest or favourable sector dynamics (see Chart 3 below).  

Chart 3:

Closing Thoughts 

Lafarge Africa’s financial fundamentals, marked by rising profitability and low debt structure, have clearly translated into strong market confidence, as evidenced by its sharp share price rally. The group could maintain this trajectory if it addresses its mild liquidity constraints, which would further solidify its position as a resilient and growth-oriented player in Nigeria’s industrial space. Analyst anticipates sustained earnings growth in Q3 2025.