Lafarge Cement Wapco pretax profit and revenue rise

Lafarge Cement Wapco reported a double-digit rise in pretax profit and revenue for the first half of 2014 as demand remained strong despite the rainy season slowing building activity.

The company, which last month merged with Lafarge’s South African subsidiary, reported a pretax profit of 29 per cent rise in first-half to NGN17.74bn (US$85m). Revenue rose by 12 per cent to NGN55.35bn (US$341m) from NGN49.48bn in the corresponding period of last year.

The company said it achieved growth in sales despite low demand for cement caused by the rainy season which slowed construction activities, as well as Nigeria’s delay in the passage of its 2014 budget.

Cost margins were down to 57.1 per cent in 1H14 from 61.03 per cent a year earlier while gross margin increased to 42.33 per cent in 2014 from 38.96 per cent in 2013 despite high energy costs. Nigerian cement manufacturers have been incurring spiralling costs caused by shortage of gas supply and many firms are shifting to Low Pour Fuel Oil (LPFO), a more expensive source of energy.