Lafarge Africa: Impressive revenue, profit amid severe competition in cement industry

By Philemon Adedeji

Lafarge Africa plc reported an unbroken performance in most parameters in its unaudited financial statement for the period ended June 30, 2022 and maintained its position as one of the leading cement manufacturing companies in Africa.

The company has once again put up a remarkable performance in the year under review when compared with the company’s performance in half year (H1) 2021 result and accounts.

Also, Lafarge Africa announced N186.6billion revenue in H1 2022 from N146.02billion in H1 2021, representing an increase of 29 per cent.

The breakdown of Lafarge Africa’s revenue showed 28.2 per cent increase in cement sales to N181.09billion in H1 2022 from n141.27billion in H1 2021, while revenue generated from aggregates and concrete rose by 45.3 per cent to N5.2billion in H1 2022 from N3.59billion reported in H1 2021.

In addition, Lafarge Africa reported N276.7million revenue from other products in H1 2022, representing an increase of 73.8 per cent from N159.21million in H1 2021.

Other products represent revenue earned from the sale of mortar for the company, while sales of mortal and power for the Group.

In terms of capacity, Lafarge Africa has a current installed cement production capacity of 10.5 metric tonnes/pa and its cement operations in the South West (Ewekoro and Sagamu in Ogun State), North East (Ashaka, in Gombe State), South East (Mfamosing, Cross Rivers State) with Ready-Mix operations in Lagos, Abuja and Port Harcourt.

The group reported announced N90.52billion in production cost of sales in H1 2022, representing an increase of 25 per cent from N72.54billion reported in H1 2021.

Consequently, gross profit of the company stood at N96 billion in H1 2022 from N72 billion achieved in H1 2021, reflecting an increase of 32.1 per cent.

Lafarge cement 2022 unaudited H1 2022 result showed impressive performance in its Profit After Tax (PAT).

Another top-line performance in the unaudited results for H1 2022 revealed 10.3 per cent growth in administrative expenses which rose significantly to N10.1 billion in H1 2022 from N9.2 billion  in H1 2021

The rate at which the company sell and distribute grew by 45.4 per cent to N37.7 billion in H1 2022 from N25.9 billion derived in H1 2021.

The modest performance translated into Profit Before Tax (PBT) that stood at N46.9 billion H1 2022 from N36.8 billion in H1 2021, reflecting a marginal difference of 27.6 per cent.

Also, the company recorded 32.1 per cent growth in Profit After Tax (PAT) to N37.4 billion in H1 2022, up from N28.3 billion accounted in the prior-year period.

In addition, the cement manufacturing Earnings Per Share (EPS), recorded during the period under review gained a 31 per cent to 232 kobo in H1 2022 from 176 kobo derived in H1 2021.

Balance Sheet on Impressive Position

From the balance sheet, the company’s total assets deployed as of June 30th 2022 stood at N568 billion from N526.8 billion as of December 31st 2021, an increase of 7.8 per cent.

As total current assets gained a 14.6 per cent to N156.5 billion as of June 30th 2022 from N136.6 billion as of December 31st 2021, while total non-current assets also rose by 4.9 per cent to N409.5 billion as of June 30th 2022.

Lafarge Africa recorded 29.8 per cent decline in loans and borrowings which stood at N1.742 billion as of June 30th 2022 from N2.5 billion as of December 31, 2021.

In addition, total liabilities of the company’s increased further to N168 billion as of June 30th, 2022 from N148 billion as of December 31st, 2021, an improvement of 13.4 per cent.

As total current liabilities grew by 15.9 per cent to N152 billion as of June 30th, 2022 from N131 billion as of December 31st, 2021, but total non-current liabilities had a challenge during the period depreciated by 6.2 per cent to N409.5 billion as of June 30th 2022 from N390.2 as of December 2021.

Conclusion

Currently, Lafarge has a global network presence in more than 50 countries in all continents, with over 180 cement plants, 80 waste pre-treatment facilities/ dedicated co-processing installations, an employee strength of 2,000 employees globally, and more than 10,000 customers worldwide.

The CEO of Lafarge Africa, Khaled El Dokani in a statement said, “Our Q2 2022 performance shows significant improvement over Q2 2021, with net sales of +30.5 per cent, recurring EBIT of +12.8per cent and net income of +3.5 per cent.

“Our H1 2022 results are even more impressive, with 28.7per cent and 32.1 per cent growth in net sales and net income, respectively.

“This further confirms the consistent resilience and robustness of our business. We are equally pleased with the progress we are making on sustainability; our use of affordable clean energy and agro-ecology footprint are in accordance with our net zero pledge journey.”

On the second half of 2022 outlook, he said, “Positive demand momentum expected in H2 2022.

“We will continue to maximize volume opportunities across our markets and actively manage our costs. We remain focused in our drive towards sustainability.”