NASCON Allied Industries Plc has reported a pre-tax profit of N14.98 billion in its first quarter (Q1) ended March 31, 2026, representing a 32.45% increase from N11.31 billion recorded in the corresponding period of 2025.
The Q1 2026 financial results released on the Nigerian Exchange (NGX) show that the moderate performance was driven by significant cost efficiency and improved operating margins.
Despite a modest decline in revenue, the company delivered strong profitability growth, supported by a sharp reduction in cost of sales, lower finance costs, and improved operational efficiency.
Key highlights (Q1 2026 vs Q1 2025):
- Revenue: N39.34 billion, down 5.99% YoY
- Cost of sales: N18.89 billion, down 21.13% YoY
- Gross profit: N20.45 billion, up 14.27% YoY
- Operating expenses: N0.86 billion, down 87.93% YoY
- Pre-tax profit: N14.98 billion, up 32.45% YoY
- Post-tax profit: N9.89 billion, up 30.63% YoY
- Finance cost: N0.09 billion, down 59.26% YoY
- Total assets: N160.77 billion, up 77.07% YoY
- Total liabilities: N79.70 billion, up 98.74% YoY
- Total equity: N81.07 billion, up 60.27% YoY
- EPS: 1,463 kobo, up 30.42% YoY
Driving the numbers:
A closer look at the company’s performance shows that improved cost management was the primary driver of earnings growth.
Revenue declined by 6% to N39.34 billion, reflecting softer sales, likely due to pricing pressures and evolving market dynamics. However, this was more than offset by a substantial 21.13% drop in cost of sales to N18.89 billion, largely driven by lower raw material costs and improved production efficiency.
- This pushed gross profit up by 14.27% to N20.45 billion, highlighting a strong improvement in gross margins despite the revenue contraction.
- Operating efficiency improved significantly, with operating expenses dropping sharply by 87.93% to N0.86 billion, supporting a 20.39% rise in operating profit.
- Finance income more than doubled to N2.53 billion, while finance costs declined by 59.26% to N86.48 million, reflecting reduced borrowing costs and improved treasury management.
As a result, pre-tax profit rose by 32.45% to N14.98 billion, while post-tax profit increased by 30.63% to N9.89 billion, despite a 36.5% rise in tax expense to N5.09 billion driven by higher Company Income Tax and development levy.
Balance sheet position:
Total assets surged by 77.07% to N160.77 billion, supported by significant increases in current assets, particularly trade receivables.
- Trade receivables rose sharply by over 200% to N60.22 billion, suggesting increased credit sales and potential cash flow pressures.
- Total liabilities nearly doubled by 98.74% to N79.70 billion, driven largely by higher current liabilities, including trade payables and short-term borrowings.
- Total equity grew by 60.27% to N81.07 billion, reflecting stronger retained earnings and improved profitability.
Rising leverage and working capital pressures remain key considerations in the balance sheet outlook.
More insights:
While profitability metrics remain strong, some underlying pressures persist.
- Administrative expenses rose to N2.60 billion, indicating higher overhead costs.
- Inventory levels, though lower year-on-year, remain elevated at N14.34 billion, potentially tying up working capital.
- Contract liabilities increased by 31.6% to N5.57 billion, reflecting deferred revenue obligations.
- Lease liabilities and borrowings, though moderate, point to growing financial commitments.
These factors highlight the need for careful liquidity and working capital management going forward.
Market reaction:
The company’s strong earnings performance has been reflected in its stock price momentum on the Nigerian Exchange.
- NASCON closed at N206.90 per share on April 28, 2026, representing a 92.5% gain from its opening price of N107.50 at the start of the year.
- The stock has also gained 36% over the past four weeks, ranking among the top performers on the exchange.
With a market capitalisation of approximately N559 billion, NASCON ranks among the top 30 most valuable stocks on the NGX, with sustained investor interest supported by strong earnings growth and improved margins.
What you should know
The company’s Q1 2026 performance underscores sustained earnings rebound following 2025 full-year earnings performance that saw profit after tax more than double to N33.5 billion.
The company distributed N6 per share dividend to shareholders for the 2025 financial year, about 200% increase over the previous year, and the highest since listing on the Exchange.
Significant reduction in cost of sales and finance costs has boosted profitability in Q1, 2026 despite lower revenue.
