Lafarge Africa Grows Q1 2020 Profit by 153%
By Dipo Olowookere
The turnaround initiatives of Lafarge Africa Plc may have come to stay going by the first quarter financial results of the company released last Friday.
The firm, which after offloading its South African arm last year started to get fresh air, said in the first three months of 2020, recorded a 153.1 percent growth in profit after tax.
In the period under review, the cement giant printed a net profit of N8.1 billion compared with the N3.2 billion achieved in the corresponding period of 2019.
It also posted a profit before tax of N9.4 billion in the period in contrast to N4.6 billion reported in the first quarter of last year.
On the top line, revenue increased to N63.7 billion from N58.0 billion, while cost of sales jumped to N46.1 billion from N40.4 billion.
The selling and marketing expenses were down to N838.4 million from N916.5 million, while administrative expenses dropped to N5.1 billion from N5.3 billion.
The firm also said it increased its other income to N151.9 million from N34.6 million and had flat a gross profit of N17.6 billion over the two periods, with operating profit slightly up to N11.8 billion from N11.5 billion.
Also, Lafarge Africa said its finance income significantly reduced to N114.7 million from N1.4 billion, while the finance costs broadly fell to N2.6 billion from N8.3 billion.
Commenting on the results, the CEO of Lafarge Africa, Mr Khaled El Dokani, stated that, “I am proud of the plan Lafarge Africa has implemented to protect the health of our people while supporting our partners and communities.
“The first quarter results confirm that our turnaround initiatives are effective and our strong balance sheet is mitigating the risks borne by the pandemic that has started hitting our country in March.”
Also, the company said COVID-19 impact on the 2020 results cannot be reasonably estimated at this stage, but long-term prospects remains positive.
However, Lafarge Africa said it expects that the public safety measures issued by the federal and state authorities in Nigeria and around the world will adversely affect the company’s results in Q2, 2020.
Despite short-term disruptions, Lafarge Africa Plc expressed confidence in the underlying resilience of its businesses and operating model as the company has developed robust cost and cash optimization initiatives.
“The Lafarge Africa’s strong balance sheet and reduced cost base will also help minimize the negative effects of the COVID-19 pandemic,” the firm said.