Despite delivering over N180 billion in revenue, its highest for any first quarter, Julius Berger Nigeria Plc saw its pre-tax profit tumble by nearly 65% in Q1 2025, as cost pressures and foreign exchange losses reversed much of the company’s topline gains.
The construction heavyweight posted a pre-tax profit of N5.9 billion for the three-month period ending March 31, down sharply from N16.7 billion recorded in Q1 2024.
This came despite a 62.8% surge in revenue, with major civil engineering contracts accounting for N125.1 billion, while building and services contributed N30.2 billion and N25.2 billion respectively.
However, cost of sales jumped 70.3% to N153.1 billion, outpacing revenue growth and shrinking margins.
Gross profit rose to N27.4 billion, a 30.7% improvement from the same period last year, but rising administrative expenses and a dramatic fall in other income quickly erased those gains.
Administrative costs climbed to N22.6 billion, reflecting ongoing inflationary pressures and the higher cost of delivering on project commitments.
Adding further strain, the company reported a net foreign exchange loss of N1.8 billion in Q1 2025, a significant reversal from the N9.4 billion gain recorded in the previous year.
This dragged ‘other gains’ down to just N75.2 million, compared to N9.6 billion in Q1 2024.
As a result, operating profit plummeted by 76.5% to N3.1 billion, while investment income slipped 17.5% to N3.7 billion.
Yet, the company’s fundamentals remain intact.
Julius Berger’s total assets climbed to N1.05 trillion, up 37.3% year-on-year, and retained earnings rose to N62.6 billion, a 6.2% increase that suggests continued shareholder value.
The results reflect broader economic headwinds facing Nigeria’s construction sector, where exchange rate volatility and high input costs are undercutting profit margins across the board, even as demand for infrastructure remains strong.
As of April 30, 2025, Julius Berger’s shares traded at N137.00, marking a year-to-date decline of 11.76% on the Nigerian Exchange.
