Lafarge Africa reports N5.2b profit in Q1 2017

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Lafarge Africa Plc, has recorded profit after tax of N5.2 billion for the first quarter 2017 financial year from a loss after tax of N1.9 billion in the prior period.  

In its financial statement submitted to the Nigerian Stock Exchange (NSE) on Monday, Lafarge Africa Plc also announced that revenue improved by 55 percent from N52.4 billion in Q1 2016 to N81.3 in Q12017.

Improved earnings were on the back drop of price increase, and energy optimisation savings.

The group raised prices in Q1’17 in a bid to protect margins.

Gross margin for the period thus increased 25.7% ahead of the 14.8% reported in Q1’16 but behind the 38.4% recorded in Q4’16.

Energy optimisation projects have started to yield dividend as the group achieved record performance in Alternative Fuel at the Ewekoro plant, up to 46%, while EBITDA Margin in Nigeria reached 30 percent during the quarter.

Speaking on the result, Michel Puchercos, CEO of Lafarge Africa noted that the turnaround plan of the company continued to deliver strong results in Q1 2017, in spite of the challenging environment in Nigeria & South Africa.

“In Nigeria, domestic cement volume improved by six per cent compared to last quarter, thanks to seasonality, however the market declined compared to last year due to the recession that started in Q2 2016.

“Our commercial transformation contributed to improved performance and sustained market share, the logistics  & industrial improvement plan delivered the expected benefits and our energy optimisation strategy (AF & coal substitution) achieved record performance, mitigating gas shortages at low cost. EBITDA margin reached 30 per cent during the quarter in Nigeria.

“In South Africa, the activities were affected by lower volumes in the cement division, despite the price increase from last year. The company continues to focus on cost optimisation, to restore profitability.”

Looking forward however, Puchercos noted that the company was on track to deliver its ambition for 2017 and maintained outlook for the cement demand growth of zero per cent to two per cent for Nigeria.

During the quarter, the company advanced in its investment for the Ashaka CPP, initial work for AF and coal development and completion of the Mfamosing line II.

Net debt of the company remained stable at to N107 billion, while total capital expenditure in the quarter reached N9.1 billion.

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