The share price of Lafarge Africa Plc gained the maximum 10.2 per cent at the stock market yesterday as investors reacted positively to the first quarter (Q1) to March 31, 2017 results reported by the cement company. The financial performance showed a profit after tax (PAT) of N5.2 billion compared with a loss of N1.9 billion in the corresponding period of 2016.
Lafarge Africa reported a revenue of N81.3 billion, up by 35.1 per cent from N52.4 billion. Cost of sales went up by 35.3 per cent from N44.6 billion to N60.4 billion, while gross profit soared by 168.5 per cent from N7.8 billion to N20.9 billion. Other income improved from negative N1.5 billion to positive N900 million in 2017.Net financing cost remained high at N3.9 billion, showing an increase of 94 per cent compared with N2.0 billion in 2016.
Profit before tax (PBT) stood at N9.4 billion, as against a loss of N2.2 billion in 2016, while PAT was N5.2 billion compared with a loss of N1.9 billion in 2016. Impressed with the recovery from loss, investors reacted positively by increasing demand for the stock. As a result, it rose from N46.00 to close at N50.71 to lead the price gainers for the day.
Commenting on the results, Chief Executive Officer of Lafarge Africa, Michel Puchercos, said: “Our turnaround plan continued to deliver strong results in Q1 2017, in spite of the challenging environment in Nigeria & South Africa. In Nigeria, domestic cement volume improved by six per cent compared to last quarter, thanks to seasonality, however the market declined compared to last year due to the recession that started in Q2 2016.”
According to him, their commercial transformation contributed to improved performance and sustained market share, the logistics and industrial improvement plan delivered the expected benefits, adding that their energy optimisation strategy ( alternative fuel and coal substitution) achieved record performance, mitigating gas shortages at low cost.
“In South Africa, the activities were affected by lower volumes in the cement division, despite the price increase from last year. The company continues to focus on cost optimisation, to restore profitability. Overall, we are on track to deliver our ambition for 2017 and maintain our outlook for the cement demand growth of about two per cent for Nigeria.”
He disclosed that the company disposed of the Elephant Cement House to the Lagos State Government for N3.1billion, generating a capital gain of N1.2 billion.