NASCON Allied Industries Plc had a strong first half of 2026.

Pre-tax profit rose 27.59% to N29.70 billion for the six months ended 30 June, earnings per share climbed 25.74% to N14.51, and the company’s margins improved across the board.

Two things drove the gain: the business is running more efficiently, and NASCON is earning noticeably more from the cash sitting in its accounts.

Of the N6.42 billion increase in pre-tax profit, N3.20 billion came from the core business; better cost control lifting operating profit and N3.22 billion came from interest earned on NASCON’s cash holdings.

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Both are genuine gains, though it is worth knowing that roughly half of this profit growth came from treasury income rather than from selling more salt.

Stronger margins, not more sales

Revenue grew only 3.84% to N81.16 billion, but NASCON still managed to grow profit well ahead of sales, because costs fell.

  • Cost of sales dropped 1.03% to N40.35 billion even as revenue rose, which pushed gross profit up 9.16% to N40.81 billion and lifted gross margin to 50.28% from 47.83%.
  • The savings came from cheaper inputs rather than smaller volumes: raw material costs fell 1.42% to N35.45 billion and manufacturing expenses dropped 8.04% to N3.06 billion, more than offsetting a 33.89% rise in production wages.
  • Administrative costs rose faster than revenue, up 21.10% to N5.48 billion, but distribution costs barely moved.
  • Altogether, operating profit rose 15.01% to N24.53 billion, and the operating margin widened to 30.22% from 27.29%, a solid improvement built on cost discipline.

The other half of the profit story came from NASCON’s balance sheet. The company earns interest on short-term deposits, and that income more than doubled to N5.35 billion, while the interest it pays on borrowings fell as debt shrank to almost nothing (just N64.74 million).

This is possible because NASCON is sitting on N46.05 billion in cash with barely any debt a strong, low-risk financial position that is now generating meaningful income on its own.

Worth noting is that this profit mix looks different from NASCON’s full-year 2025 performance. In FY2025, revenue grew a healthy 26.83% to N152.69 billion, and operating profit alone made up about 81% of the N24.59 billion increase in pre-tax profit, with finance income contributing the remaining 19%.

In H1 2026, that balance has shifted closer to 50-50, on much slower revenue growth of 3.84%. NASCON’s core business is still growing profitably, but it is currently leaning more heavily on treasury income than it did across all of last year.

Two things worth watching

The first is how long the company can keep earning interest at this level; deposit rates move with the market and won’t necessarily stay this generous.

The second concerns the money NASCON is owed. Trade and other receivables amounts owed to the company — rose 68.01% to N65.20 billion, or 40.36% of total assets, growing much faster than revenue.

  • Most of this, N57.66 billion or 88.43% of the total, is owed by related parties within the group rather than outside customers, and this portion grew 60.23% over the year.
  • This does not affect the profit already reported, but it does mean a growing share of NASCON’s assets is tied up as amounts owed rather than cash in hand, and current liabilities of N79.05 billion, including N55.17 billion in trade payables and N21.77 billion in tax due, depend in part on these balances being settled on time.

The provision set aside against this exposure is small: N137.87 million against roughly N63.21 billion in gross receivables, or 0.22%, and it did not increase even as the balance grew sharply.

This may simply reflect confidence that related-party balances are safe and will be paid; NASCON has not disclosed the payment terms or ageing of these amounts, so it isn’t possible to say more than that it is worth monitoring.

There was also a softer second quarter: revenue rose 6.29% from Q1 to Q2, but costs rose faster, so gross and operating margins eased back slightly (gross margin to 48.69% from 51.98%, operating margin to 28.66% from 31.88%).

Most of the half-year’s margin gain was banked in the first quarter. This is a normal fluctuation to keep an eye on rather than a red flag on its own.

The upside for investors and the fine print

The market has responded well to NASCON’s performance. The shares are up 80.93% year-to-date to N194.50, though still 12.39% below the 52-week high of N222.00.

The share price gains track genuinely impressive earnings run: basic EPS rose from N1.10 in 2021 to N12.41 in FY2025, and trailing twelve-month earnings have since climbed further to N13.26.

At the current price, the shares trade at 14.67 times trailing earnings, which looks reasonable relative to that growth rate though some of that growth was unusually fast and is already showing signs of settling into a steadier pace, so investors shouldn’t expect the same rate of increase to continue indefinitely.

NASCON also rewards shareholders generously through dividends, which have grown even faster than earnings: from N0.39 per share in 2021 to N6.00 in 2025, lifting the share of profit paid out to 48.35% from 19.29% two years earlier.

At the current price, that is a dividend yield of about 3.08%, with room for further increases given how strongly earnings have grown this year.

Overall, NASCON delivered a genuinely strong half wider margins, healthy cash generation, a fast-growing dividend, and a share price that has rewarded patient investors.

The main things to watch going forward are how much of the current profit growth depends on interest income rather than the core business, and whether the related-party receivables get collected as promptly as they are growing. Neither is a problem today, but both will shape how durable this earnings growth turns out to be.