Cement manufacturing firm, Ashaka Cement Plc has reported a profit rise of 54 per cent for the second quarter ended June 30, 2012. The result released on the floor of the Nigerian Stock Exchange (NSE) showed a turnover of N12.261 billion in 2012, compared with N10.22 billion in the corresponding period of 2011. Profit after tax rose by 54 per cent from N1.614 billion to N2.489 billion in 2012. Net assets grew from N19.047 billion to N21.536 billion in 2012.
Commenting on the result, analysts at FBN Capital Limited said the impressive performance may not be unconnected with efficient management of distribution and logistics as well as higher utilisation of coal to fuel power plants.
“While we do not yet have management’s comments on the drivers behind the improvement in earnings, we believe that efficiency gains relating to the company’s distribution and logistics side of the business, as well as likely higher utilisation of coal in its fuel consumption mix relative to low pour fuel oil (LPFO), helped,” they said.
The chairman of the Ashaka Cement, Alhaji Umaru Kwairanga, had assured shareholders of the company of better performance and improved return on investment in the years ahead.
The Chairman gave this assurance while addressing shareholders, at 37th Annual General Meeting of the company held last July in Gombe State.
According to him, the substantial deficit in the nation’s country’s housing stock and a large percentage of unpaved road network present vast opportunities for the cement manufacturing sector.
“Our aim therefore, is to intensify efforts in the acceleration of projects that will improve our costs and production volumes so that we are set to fully participate and enjoy the benefits that these opportunities will bring,” he said.
Kwairanga noted that a key element of the company’s cost reduction effort was focused on increasing the substitution rate of local coal for expensive low pour fuel oil (LFPO) as fuel for firing of its kilns.
Speaking in the same vein, the Managing Director/Chief Executive Officer of Ashaka Cement, Mr. Neeraj Akhoury, said the prime objective of the company is to maximise the rate of utilisation of production capacity.
“The third and most important objective is to start the first phase expansion through which we should target a production capacity of 1.3 million tonnes. We also in the process of enhancing our information technology with a robust application package to improve our business processes and optimise our turnaround time,” he said.