Dangote, Lafarge BUA Combine Report N380bn Profit
Nigeria’s listed cement companies, Dangote, Lafarge and BUA reported a combined profit of about N380 billion in the first half of 2024, details from their separate unaudited financial statement revealed.
In the period, macroeconomic conditions have negative impacts on their individual results, based on the earnings released to the Nigerian Exchange.
It was only Dangote Cement Plc. that grew profit year on year as both BUA and Lafarge earnings performance declined in the period.
Nigerian cement industry experienced significant topline growth, with total revenue of all the listed players in the sector rising significantly by 76.67% year on year to N2.42 trillion, compared to N1.37 trillion in the same period in 2023, CSL Stockbrokers said in an update.
Analysts attribute the robust increase to higher prices and increased sales volumes due to heightened demand from increased government capital expenditure (CAPEX) and private-sector activity.
CSL noted that Dangote Cement, the leading manufacturer in the sector, played a crucial role in this growth, with its revenue soaring by 85.11% to N1.76 trillion in H1 2024, up from N950.83 billion in H1 2023.
BUA Cement, the second-largest cement producer in Nigeria, also posted impressive results, with revenue growing by 64.63% year on year to N363.94 billion in H1 2024, compared to N221.07 billion in H1 2023.
Similarly, Lafarge Africa saw a substantial revenue increase of 49.5% year on year, reaching N295.58 billion in H1 2024, up from N197.68 billion in the previous year.
Despite increased demand, the cement sector encountered significant challenges due to macroeconomic pressures, most notably the depreciation of the Naira, CSL Stockbrokers said in its update.
Analysts said the depreciation led to substantial foreign exchange (FX) losses for the three listed players amounting to N261.19 billion—a 125.6% year on year increase.
“These FX losses significantly impacted the financial performance of the companies, with two of the three major players seeing declines in pre-tax profits”.
Earnings details revealed that WAPCO reported a notable 15.7% drop in profit before tax which settled at N46.63 billion in the first half of 2024.
Also, BUA Cement’s pretax profit fell by 47.5% to N40.13 billion in the same period due to fast rising costs profile.
In contrast, Dangote Cement managed to report a 0re-tax profit of N292.96 billion, marking a 22.1% increase from the previous year.
This strong performance was bolstered by robust revenue growth, driven by improved sales volumes from its Nigerian operations, which helped offset the negative impact of FX losses and strengthen its bottom line. $6.4 Trillion Wiped off Markets –U.S Fed Asks to Cut Rate
