By Dipo Olowookere
In the third quarter of 2020, Lafarge Africa Plc posted an impressive performance, with double-digit growth and a strong balance sheet.
In the financial statements for the period ended September 30, the cement firm grew its recurring EBIT by 7.2 per cent despite the significant devaluation of the Naira.
In the period, the revenue increased to N179.9 billion from N163.1 billion, while the cost of sales rose to N123.8 billion from N112.7 billion, leaving the gross profit at N56.1 billion as against N50.4 billion of the same period of 2019.
In the results released last week to the Nigerian Stock Exchange (NSE), the selling and marketing expenses reduced to N2.8 billion from N3.2 billion, while the administrative costs marginal rose to N13.0 billion from N12.3 billion, with other income up to N866.1 million from N810.5 million.
Operating profit, according to the results, stood at N41.1 million in Q3 2020 versus N35.5 billion in Q3 2019. In the same period, the finance income closed at N721.4 million in contrast to N1.2 billion in the corresponding period of last year, while the finance costs dropped to N7.5 billion from N16.6 billion.
A look at the bottom line of the results showed that the profit before tax increased to N34.3 billion from N20.1 billion, while the profit after tax rose to N28.2 billion from N20.6 billion.
Commenting on the results, the CEO of Lafarge Africa Plc, Mr Khaled El Dokani, stated that: “Our robust results for the first 9 months reflect the strong recovery of the demand in Q3 and the successful implementation of our health, cost and cash initiatives.
“Both have delivered a considerable improvement in recurring EBIT, net income and free cash flow, despite the impact of the COVID-19 pandemic and Naira devaluation, particularly in Q3.”
On the outlook for the last quarter of the year, the cement company said the market demand is expected to remain strong, though it expressed concerns that Naira devaluation and inflation will likely affect the economy and its business.
However, Lafarge Africa expressed confidence that “the implementation of our health, cost and cash initiatives would continue to deliver improvement in our performance,” emphasising that “we will maintain a healthy balance sheet.”
Adedapo Adesanya