Lafarge Africa Profit Slides to N54bn in 2023
Lafarge Africa grew revenue by 8.6% year on year to N405.50 billion in 2023 from N373.25 billion in financial year 2022. The company’s cement sales increased in the period, concrete sales went up and other products saw additional growth, the breakdown of its earnings sources showed.
Cost of Sales which analysts adjusted for depreciation increased 12.6% year on year, rising above revenue growth in the period to settle at N172.82 billion from N153.43 billion in 2022.
The surge was driven by higher direct costs due to the impact of the persistent devaluation of the currency on the cost of imported raw materials, elevated inflationary pressures, and rising energy costs.
In 2023, the company’s profit grew 5.9% to N232.68 billion. However, gross margin declined by 1.5ppts to 57.38% in 2023 from 58.89% in 2022.
In a statement released, the company stated that 2023 profit after tax declined by 4.7 per cent, Mr Lolu Alade-Akinyemi, Chief Executive Officer, Lafarge, disclosed this in a notification sent to the Nigerian Exchange Ltd. (NGX) on Thursday in Lagos.
Alade-Akinyemi said that the company’s PAT dropped from N53.647 billion recorded in 2022 to N51,141 billion in 2023. He explained that the higher effective tax rate in 2023 after the expiry of the Pioneer Status Incentive in 2022, coupled with pressures from foreign exchange losses, led to the downward performance.
The Lafarge boss stated that the firm’s performance was largely impacted by spiralling inflation and unprecedented Naira devaluation, with the attendant pressure on energy and supply chain costs.
“In the face of very material FX devaluation losses and higher effective tax rate, our PAT declined Year-on-Year by 4.7 per cent.
“Despite these challenges, we continue to maintain a strong free cash flow position and a strong balance sheet, positioning us for sustainable growth over the medium to long term.
“We are committed to delivering sustainable value to all stakeholders in the coming years, as we have done historically,” he said.
According to him, the company, however, maintained a strong balance sheet position for the year under review with a free cash flow of N109.7 billion and net cash of N142 billion.
Alade-Akinyemi further said that the firm’s Profit Before Tax (PBT) went up by 15.7 per cent Year-on-Year despite N21 billion in Foreign Exchange losses in 2023. He noted that the fundamentals of the company’s business remain strong.
The CEO added that despite extremely challenging macroeconomic headwinds, Lafarge grew its top line by 8.6 per cent. He said the company also improved its operating margin from 22.6 per cent to 25.3 per cent in the 2023 financial year. #Lafarge Africa Profit Slides to N54bn in 2023
