Lafarge Africa revenue rises

Lafarge Africa Plc announced a profit after tax of NGN5.2bn (US$17m) versus NGN1.9bn in the same period of last year driven by an increase in revenue, comparatively higher gross margin and higher investment and other income.

Cement revenue grew by 61 per cent YoY, as relatively higher prices in both Nigeria and South Africa more than offset the lower sales volume experienced in both markets. In Nigeria volumes grew by six per cent compared to the final quarter of 2016 but were down by 12 per cent YoY.

Gross margin increased by 1086bps YoY, as higher average price offset higher average per tonne cost of production. 

Also supporting profitability during the period were other income (via capital gains from the disposal of property) and finance income (via interest on loan receivable). 

In addition, opex margin fell by 206bps YoY and 767bps QoQ, in line with management’s overall cost savings programme towards the restoration of EBITDA margins.

Michel Puchercos, Lafarge Africa Plc's CEO, said the1Q 17 performance underscored the effectiveness of the turnaround plan of the cement group.

Mr Puchercos said the group’s energy optimisation strategy achieved record performance, mitigating gas shortages at low cost, thus earnings before interest, tax, depreciation and amortisation margin reached 30 per cent.

“The company continues to focus on cost optimisation, to restore profitability. Overall, we are on track to deliver our ambition for 2017 and maintain our outlook for the cement demand growth of 0 per cent to 2 per cent for Nigeria,” Mr Puchercos said.

Management retained its 0-2 per cent demand growth, and flat to declining outlook, for both the Nigerian and South African markets respectively. According to him, in spite of the overall decline in cement market in the 1Q17, the group expects a gradual recovery of the Nigerian economy during the second half of the year.

“Lafarge Africa is well positioned to benefit from expected upturn in the market. Our business turnaround plan will further be consolidated, through local sourcing, fuel flexibility, stable industrial operations, logistics and commercial optimisation initiatives,” Mr Puchercos noted.