Lafarge Africa Plc showed its commitment towards improving profitability as it reported an impressive 44.22 percent increase in revenue for the period ended June 30, 2017. The figures shows that revenue stood at N154.83 billion in 2017 as against N107.36 billion reported same period in 2016. According to the company this overall growth was aided by improved sales volume as well as improvement in the company’s energy mix.
Given that there were no reported shutdowns of plant operations over the half year 2017 period compared to unplanned plant shutdowns that was observed in second half of 2016. Segments contributions to revenue remained similar to the previous year as cement sales contribution stood at 80.29 percent when compared to 79.59 percent that was recorded in 2016.
Cost of sales for the period grew slower than revenue having increased by 19.70 percent to N110.39 against N92.22 billion in second quarter of 2016. The increase witnessed in cost of sale for the period was largely attributed to the increase in variable cost, production fixed costs and depreciation, line items under cost of sales which increased in value by N9.41 billion, N2.92 billion and N2.80 billion respectively.
Finance cost for 2017 half year stood at N10.56 billion, up by 90.19 percent higher than N5.55 billion that was reported same period in 2016. This rise was largely driven by the increase recorded in repayment of interest on bank overdraft which grew by 161.43 percent to N1.37 billion against N0.52 billion in half year 2016.
Profit before tax was N18.16 billion against a loss before tax of N30.18 billion in 2016, while profit after tax stood at N19.73 billion against a loss after tax of N30.24 billion in 2016. The further rise in profit after tax for the period was attributed to tax credit of N1.57 billion for the period against a tax charge of N0.62 billion in second quarter of 2016. Earnings per share improved from a negative position in 2016 to a positive N3.68 kobo in half year 2017.
Commenting on the half year account, Michel Puchercos, Chief Executive Officer of Lafarge Africa explained that their objective is to deliver on the business turnaround plan in Nigeria, which is yielding visible results. Pointing out that national cement consumption contracted by 28 percent in second quarter 2017 over last year figures.
Likewise, cement sales declined by 23 percent in Nigeria second quarter of 2017. Adding that the South African operating environment remains challenging, nevertheless, sales grew by 21 percent in the half year of 2017.