By Lukmon Akintola
BUA Cement Plc increased its total interest-bearing debt by approximately N130.2 billion in the nine months ended September 2026, as the manufacturer expanded its borrowing to support investment and business operations.
The company’s unaudited third-quarter financial statements show that outstanding bank borrowings and debt securities rose to N656.85 billion at September 30, 2026, from N526.63 billion at the end of December 2025, representing an increase of about 24.7 per cent.
Bank borrowings accounted for the bulk of the increase, climbing 30.6 per cent to N613.08 billion from N469.38 billion, while outstanding debt securities declined to N43.78 billion from N57.25 billion.
The expansion in borrowing was driven largely by additional drawdowns of N233.27 billion during the nine-month period, against principal repayments of N69.10 billion.
A significant portion of the company’s financing comes from an International Finance Corporation (IFC)-syndicated loan, which increased to approximately N562.71 billion from N391.69 billion at the end of 2025.
The IFC facility now accounts for the largest share of BUA Cement’s outstanding bank loans, reflecting the company’s increasing reliance on development-backed financing rather than conventional domestic commercial credit.
However, the increase in debt has also raised the company’s net debt position, particularly as its cash and short-term deposits declined to N266.42 billion from N280.38 billion over the same period.
After accounting for available cash, BUA Cement’s net debt stood at approximately N390.43 billion, compared with N246.25 billion at the end of December 2025, an increase of about 58.5 per cent.
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Despite the higher leverage, the company’s earnings performance remained strong during the period.
Revenue increased by 26.5 per cent to N1.09 trillion from N858.73 billion in the corresponding period of 2025, while profit after tax climbed 59.8 per cent to N463.10 billion from N289.86 billion.
Profit before tax also rose by 64.4 per cent to N556.70 billion, supported by improved operating performance and a reduction in net financing costs.
The company’s investment activities provide additional context to the increase in borrowing. Additions to property, plant and equipment reached N126.33 billion in the nine months, compared with N83.60 billion in the corresponding period of 2025.
This suggests that the company is committing more resources to its productive assets while expanding its financing requirements.
Foreign exchange movements also remain an important consideration in assessing its debt exposure. BUA Cement recognised exchange gains of approximately N28.38 billion on its borrowings during the period, with a further N7.70 billion in foreign exchange gains capitalised.
The gains reduced the naira value of its outstanding foreign-currency-related obligations, although any reversal in exchange-rate movements could increase the cost of servicing such debt.
The company’s borrowing strategy therefore presents a balance between financing expansion and managing currency and repayment risks.
With its debt increasing faster than its cash reserves, the ability of BUA Cement to sustain earnings growth, generate sufficient operating cash and manage its foreign-currency exposure will remain important to its financial position.
