Lafarge Grows Revenue by 50%, FX Loss Damage Earning
Lafarge Africa Plc revenue climbed significantly in the first quarter of financial year 2024 following an industry-wide increase in price of cement.
The company’s revenue grew by 50.0% year on year, supported by 49% year on year increases across its cement sales in addition to 84% surge in revenue from aggregates and concrete and about 77% jumps in mortar and power revenue line.
In a review, analysts at Cordros Capital Limited believe the outturn was majorly supported by higher volumes following a pickup in cement demand coupled with likely price increases in the review period.
Gross margin slumped by 565bps to 52.5%, as cost of sales ex-depreciation advanced by 70.3% year on year driven by increases across its entire cost line, Cordros Capital Limited.
The company witnessed inflationary influenced costs pressures in addition to negative impacts of rising energy costs. Notably, raw materials and energy costs rose by 61.6%, salaries and electricity increased by 86.8% and maintenance surged by 104.8%, aggressively pushing the company’s costs profile.
Sequentially, operating expenses ex-depreciation settled more than 45% higher, majorly attributable to expenses arising from fuel, outbound freight, outsourced mining activities and salaries.
The cement company recorded net finance cost of N21.53 billion in Q1-2024 compared to the net finance income of N24.23 million in Q1-2023.
In its review, Cordros Capital said just like its local peers, the company recorded net FX losses amounting to N21.80 billion in Q1-2024, due to the naira depreciation in the first three months of the year.
Lafarge pretax profit declined by 61.3% year on year to N8.71 billion in Q1-2024 from N22.48 billion in the comparable period in 2023. Analysts said following a lower tax expense of N3.52 billion, profit after tax settled 65.2% year on year lower at N5.19 billion in Q1. Treasury Bills Yield Plunged to 22% over Buying Interest
