Lafarge Africa delivered in the first quarter a post-tax profit more than eight times what it reported in the same period of last year, an epic result, leaving the cement maker just a breath away from its net profit for the whole of 2023.
The spur was a jump in sales by 80.3 per cent which the company, whose products also comprise concrete, mortar and aggregates, said in a statement on Thursday was itself driven by higher output.
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The manufacturer cited a considerable stability in naira, its reporting currency, as a factor for the much-improved bottom line, unlike in the preceding year when a volatility in exchange rate hammered profit in some way. No significant FX losses were reported this time around, the company said.
PREMIUM TIMES reports that a construction boom in Nigeria on account of the government’s renewed focus on infrastructural development, coupled with an increased private sector participation, is bucking up demand for cement, in turn lifting its price to record levels.
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Last year, that carved a path for Lafarge Africa alongside fellow market giants – Dangote Cement and BUA Cement – to post all-time high revenues, even though operational expenses spiked.
The share price of Lafarge Africa hit its peak level in 52 weeks in Lagos, where the stock is quoted, after the earnings release on Thursday, joining four other stocks to lead gainers as of 14:03 WAT.
“We achieved solid financial results in Q1, with Net Sales growth of 80 per cent, Operating profit up 137 per cent, and Profit After Tax of N48.6bn, a strong performance driven by our innovative product offerings and strategic operational Initiatives,” said Lolu Alade-Akinyemi, the CEO.
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The addition of Ground Calcium Carbonate (GCC) – a multipurpose filler used for asphalt mix in construction – to the company’s product portfolio was the high point of its innovative strides during the period.
Besides its primary uses, GCC is essential to cutting carbon in concrete solutions, falling in place with the company’s decarbonisation drive.
ECOPlanet cement, a similar product aiming for a lower carbon footprint in the construction sector, is on track for introduction in the South-west by June, after the company launched it in the South-east about the same time last year.
Net profit margin in the period under review climbed to 19.6 per cent from 3.8 per cent. Pre-tax profit, at N73.1 billion, was 739.5 per cent higher, while profit after tax rose to N46.6 billion from N5.2 billion.
Swiss-based Holcim, Lafarge Africa’s majority owner, announced last December a deal offloading its 83.1 per cent stake to China’s Huaxin Cement in exchange for $1 billion. The sale is expected to reach closure later this year. However, PREMIUM TIMES reports that the Nigerian Senate is now investigating the deal after some senators raised concerns about it.
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