HBM Nigeria’s 9M pre-tax profit jumps 32.4% to N414.43 billion as finance costs fall 63%

HBM Nigeria Plc recorded a 32.4% increase in pre-tax profit to N414.43 billion for the nine months ended September 30, 2026, compared with N313.29 billion in the corresponding period of 2025, supported by lower finance costs and improved operating margins.

This is according to the company’s unaudited third-quarter financial statements filed with the Nigerian Exchange (NGX), which showed revenue rising by 18.9% to N928.25 billion from N780.49 billion.

Profit after tax increased by 30.9% to N271.99 billion from N207.78 billion, while earnings per share rose to N16.89 from N12.90.

Finance costs fall 63.2%

HBM’s pre-tax profit grew faster than revenue during the nine-month period, supported by stronger margins and a significant reduction in financing expenses.

Operating profit increased by 28.2% to N382.68 billion from N298.41 billion, while net finance income more than doubled to N31.75 billion from N14.88 billion.

• Finance costs declined by 63.2% to N1.98 billion, largely because lease interest fell to N655 million from N3.77 billion.
• Finance income increased by 66.4% to N33.73 billion, while interest income on deposits doubled to N34.40 billion.
• Gross profit rose by 21.8% to N555.60 billion, lifting gross margin to 59.85% from 58.44%, while operating margin improved to 41.23% from 38.23%.
• Cement revenue increased to N901.43 billion from N759.62 billion, accounting for approximately 97% of total revenue.
• Production costs rose by 14.9% to N372.65 billion, below revenue growth, although fixed production and maintenance costs increased by 30.4% and 50.9%, respectively.

Selling and distribution expenses declined by 5.9% to N110.32 billion, while administrative expenses increased by 41.4% to N63.33 billion, including N21.73 billion in technical service fees.

The improvement lifted HBM’s pre-tax margin to approximately 44.6% from 40.1%, despite higher administrative and production-related costs.

Q3 Pre-Tax Profit falls 14.8%

HBM’s third-quarter performance contrasted with its stronger nine-month results, as pre-tax profit declined by 14.8% to N96.69 billion from N113.55 billion in the corresponding period of 2025.

• Quarterly revenue declined by 5.2% to N249.84 billion, while cement revenue fell by 6%, reflecting weaker sales during the period.
• Gross margin narrowed to 53.55% from 60.86%, as production costs increased by 12.5% despite the decline in revenue.
• Maintenance expenses more than doubled to N28.79 billion from N13.25 billion, adding pressure to quarterly profitability.
• Profit after tax declined by 15.3% to N63.64 billion, compared with the corresponding quarter of 2025.
• Selling and distribution costs fell by 37.9%, while finance costs declined by 68.5%, helping cushion the impact of lower revenue and higher production costs.
• For the nine-month period, income tax expense increased by approximately 35% to N142.44 billion, lifting the effective tax rate to 34.37% from 33.68%.

The tax expense included a N17.84 billion development levy, contributing to the slower growth in after-tax profit compared with pre-tax earnings.

The quarterly results show that lower financing and distribution costs were insufficient to offset weaker revenue and higher maintenance expenses.

Management cites planned maintenance, expansion projects

HBM Nigeria attributed its weaker third-quarter performance partly to planned annual maintenance at existing plants. The company said the work was intended to address production constraints and improve available capacity.

• In a statement accompanying the financial results, General Counsel and Company Secretary Adewunmi Alode said the nine-month performance reflected volume growth, improved distribution efficiency, and disciplined cost management.
• Management said the maintenance programme was designed to strengthen the reliability and efficiency of existing assets. It also expressed confidence in capturing stronger demand in the fourth quarter, traditionally a stronger period for cement consumption.
• The company added that expansion projects at its Sagamu plant in Ogun State, with capacity of 3.5 million tonnes per annum, and Ashaka plant in Gombe State, with capacity of 2 million tonnes per annum, were at an advanced stage.
• Both projects are expected to be delivered in the first quarter of 2027, according to the company.
• HBM also commenced engineering design for a third production line at Calabar, Cross River State. The proposed facility is a 3-million-tonne integrated cement plant, with completion expected within 12 months after construction begins.

Management said Nigeria’s cement demand outlook remained positive, supported by infrastructure development, urbanisation, and activity across the construction sector.

The company said it would continue pursuing volume growth while maintaining cost discipline and operational efficiency to protect profitability and margins.

Dividends exceed operating cash flow

HBM’s cash-flow position reflected significantly higher capital expenditure and dividend payments during the nine-month period.

Operating cash flow increased to N272.31 billion from N235.76 billion, but dividends paid rose to N354.37 billion from N96.65 billion, exceeding both operating cash flow and nine-month profit after tax.

• Capital expenditure on property, plant and equipment increased to N235.02 billion from N53.40 billion, lifting property, plant and equipment to N650.03 billion.
• Investing activities recorded a net cash outflow of N200.62 billion, compared with N36.16 billion in the corresponding period of 2025.
• Cash and cash equivalents declined by 73.5% to N102.96 billion, while retained earnings fell to N422.54 billion from N504.92 billion.
• Total assets rose by 0.9% to N1.22 trillion, while shareholders’ funds declined by 11.9% to N611.61 billion.
• The company reported no bank borrowings at the end of September, although current liabilities of N504.06 billion exceeded current assets of N384.95 billion.

HBM’s share price closed unchanged at N350 on October 28, 2026, representing a year-to-date gain of approximately 160% and a market capitalisation of about N5.64 trillion.

With the stock already recording substantial gains, investors will be monitoring whether quarterly margins recover and whether the company can sustain capital expenditure and dividend payments without further reducing its cash position.