Lafarge Africa reported its 2023 second-quarter results showing pre-tax profits grew by 29.02% year on year, reaching N32.787 billion.
This took the half-year pre-tax profits to N55.315 billion versus N46.879 billion in the same period last year.
Key highlights Q2 2023 vs Q2 2022
- Revenue N105.860 billion +10.29% YoY
- Cost of sales N48.943 billion +16.38% YoY
- Gross Profit N56.917 billion +5.5% YoY
- Administrative expenses N5.490 billion +12.49% YoY
- Selling and Distribution expenses N21.609 billion -4.51% YoY
- Operating profit N30.046 billion+13.32% YoY
- Finance Income N3.152 billion +2,201.32% YoY
- Finance cost N411 million -66.82% YoY
- Profit for the year N20.497 billion +3.25% YoY
- Earnings per share N1.27 +3.25% YoY
- Cash and cash equivalent N179.243 billion +51.39%.
- Total Assets N654.695 billion +8.99%
Insights: The growth in pre-tax profit was primarily fueled by the growth in finance income and a decline in finance costs.
- The company recorded N1.912 billion in net foreign exchange gain and N1.239 billion in interest income from short-term fixed deposits and current account in the second quarter (Q2), contributing significantly to the 2,201.32% year-on-year (YoY) growth in finance income.
- Additionally, the finance costs, which declined due to the decline in interest on borrowing and the absence of foreign exchange loss, also contributed. There was a 67% YoY decline in interest on borrowing and the absence of foreign exchange loss compared to N694 million recorded the previous year.
Lafarge Africa has been in the cement business in Nigeria for decades. The company has been noted for its high-quality cement products. The company has been a leader in the cement industry and should not relax in its efforts to maintain its leadership position. There are very strong competitors like Dangote and Bua Cement companies. The two companies met Lafarge Africa in the market, and this should always remand Lafarge Africa to be more aggressive in the market but not at the expense of its high-quality product. The Research and Development department should be enhanced in order to face the challenges from the competitors. The cement market in Nigeria will continue to grow phenomenally but what should be maintained and enhanced is the quality of your product in the marketplace. Sky is the limit of the growth of Lafarge Africa in Nigeria. Essentially, the high quality of your product must be maintained.