Lafarge Africa Plc posted a first quarter loss to start the year as the Nigerian cement maker grappled with intense competition and an inability to meet demand for its products in essence ceding market share to rival market leader Dangote Cement.
For the first three months through March 2016, Lafarge posted a loss after tax of N1.87 billion from a profit position of N5.87 billion as at March 2015. Sales were down by 29.26 percent to N52.42 billion as the company posted the worst result since its merger scheme in 2014.
This compares to Dangote Cement which grew its sales by 22.4 percent in Q1, 2016 to N140.5 billion from N114.73 billion.
According to Lafarge in a statement accompanying the results, “The cement industry grew versus same period last year. The growth extended to Lafarge as the demand for our products increased in the quarter. We sold all that was produced but were somewhat hampered by some temporary production and logistics challenges. The Nigerian volume was hence marginally down versus last year, whereas South Africa grew by 11%.”
Nairametrics investigations show the company’s top lines took a hit from the price cuts carried out by the competition.
Lafarge Africa however says it is positive about the future.
“With the logistics challenges experienced in Q1 resolved, the group is positioned for a strong Q2 and beyond and is looking forward to fill the strong demand for its products. Capacity is foreseen to ramp up with the 2.5 million ton Mfamosing line that is due to come on stream during the second half of 2016,” the Company Statement said.
All we can say for now at Nairametrics is “We shall see.”