HBM Nigeria Plc recorded a 32.4% increase in profit before tax to N414.43 billion for the nine months ended September 30, 2026, compared with N313.29 billion recorded during the same period in 2025.

The improvement was supported by higher revenue, stronger operating margins and a significant reduction in financing costs, according to the company’s unaudited third-quarter financial results filed with the Nigerian Exchange (NGX).

Revenue rose by 18.9% to N928.25 billion from N780.49 billion in the corresponding period of the previous year. Profit after tax also increased by 30.9% to N271.99 billion from N207.78 billion, while earnings per share climbed to N16.89 from N12.90.

Finance costs decline by 63.2%

HBM Nigeria’s 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 fell by 63.2% to N1.98 billion, largely due to a reduction in lease interest expenses. Finance income rose by 66.4% to N33.73 billion, supported by higher interest income on deposits.

Gross profit increased by 21.8% to N555.60 billion, while the gross profit margin improved to 59.85% from 58.44%. The operating margin also expanded to 41.23% from 38.23%.

Cement remained the company’s primary revenue source, generating N901.43 billion, representing approximately 97% of total revenue.

Production costs increased by 14.9% to N372.65 billion, below the rate of revenue growth. However, fixed production costs and maintenance expenses rose 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. The administrative expenses included N21.73 billion in technical service fees.

These results lifted the company’s profit-before-tax margin to approximately 44.6%, compared with 40.1% in the same period of 2025.

Third-quarter profit declines amid plant maintenance

Despite the strong nine-month performance, HBM Nigeria recorded weaker results in the third quarter, as planned maintenance at its production facilities affected sales and profitability.

Revenue for the quarter fell by 5.2% year-on-year to N249.84 billion from N263.51 billion. Cement revenue also declined by 6%.

Profit before tax dropped by 14.8% to N96.69 billion from N113.55 billion, while profit after tax decreased by 15.3% to N63.64 billion from N75.10 billion.

Gross margin narrowed to 53.55% from 60.86%, as production costs increased by 12.5% despite lower quarterly revenue. Maintenance expenses more than doubled to N28.79 billion from N13.25 billion.

The decline in selling and distribution expenses, alongside a 68.5% reduction in finance costs, helped cushion the impact of weaker sales and higher maintenance expenses.

HBM Nigeria said the maintenance programme was intended to address production constraints and improve the reliability and efficiency of its existing facilities.

Management expressed confidence in stronger cement demand in the fourth quarter, which is traditionally a more active period for the construction industry.

Expansion projects expected in 2027

HBM Nigeria is advancing expansion projects at its Sagamu plant in Ogun State and Ashaka plant in Gombe State. Both projects are expected to be completed in the first quarter of 2027.

The Sagamu project is designed to add 3.5 million tonnes of annual production capacity, while the Ashaka expansion is expected to contribute another 2 million tonnes per year.

The company has also started engineering design work for a proposed third production line at its Calabar facility in Cross River State. The planned integrated cement plant is expected to have a capacity of 3 million tonnes annually, with completion projected within 12 months after construction begins.

HBM Nigeria currently has an installed cement production capacity of 10.5 million tonnes per year, with operations in Ogun, Gombe and Cross River states. It also operates ready-mix concrete facilities in Lagos, Abuja and Port Harcourt.

The company said infrastructure development, urbanisation and construction activity continued to support the outlook for cement demand in Nigeria.

Dividend payments exceed operating cash flow

HBM Nigeria’s operating cash flow rose to N272.31 billion from N235.76 billion during the nine-month period. However, dividend payments increased significantly to N354.37 billion from N96.65 billion, exceeding the cash generated from operations.

Capital expenditure on property, plant and equipment climbed to N235.02 billion from N53.40 billion, reflecting increased investment in the company’s production facilities.

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 increased slightly 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. However, its current liabilities of N504.06 billion exceeded current assets of N384.95 billion.

HBM Nigeria closed trading on October 28, 2026, at N350 per share, giving it a year-to-date share price gain of approximately 160%.

Investors will be watching whether the company can recover its quarterly margins, complete its expansion projects and sustain dividend payments while managing its reduced cash balance.