Mobolaji Balogun, Chairman of Lafarge Africa Plc, on Wednesday said the overall drop in domestic cement demand was instrumental to the group’s NGN34.3bn (US$95.1m) loss before tax in the 2017 financial year.
Mr Balogun said the cement volumes sold in 2017 were lower by 15.6 per cent compared with 2016 and, as a result, operating profit plummeted to NGN7.9bn, as against NGN12.4bn the previous year.
"Cement selling prices recovered in 2017 which helped to partly offset the impact on cost of production of the over 40 per cent devaluation of the local currency in 2015 and the consequent spike in local inflation," Mr Balogun said.
"This helped to strengthen group turnover to NGN299.2bn from NGN219.7bn recorded in 2016, an increase of 36 per cent."
Mr Balogun said,"While the impact of [Nigeria's economic] recovery has gradually begun to be felt across various sectors of the economy, construction activities lagged this recovery in 2017 with overall domestic demand for cement which closed at 22.6Mt for 2016, down to 18.5Mt for 2017.”
With Nigerian plants in Ewekoro and Sagamu in the southwest, Mfamosing in the south and Ashaka in the northeast, the company currently has an installed cement production capacity of 10.5Mta.
Lafarge Africa Plc also owns 100 per cent of Lafarge South Africa Holdings (Pty) Ltd, a subsidiary with a 3.6 Mta cement production capacity.
