Lafarge Africa operating profit rises by 13.32% in Q2

Lafarge Africa Plc has released its financial results for the six months ended June 30. Its second quarter (Q2) net sales was up 10.3percent; operating profit rose 13.3percent while Profit Before Tax (PBT) was up by 29percent.

The results released at the Nigerian Exchange Limited (NGX) showed Lafarge Africa’s net sales in H1’23 went up 5.9percent; operating profit was up 7.7percent, while Profit Before Tax went up by 18percent.

The company reported healthy balance sheet with a strong net cash ofN140.6billion; with H1 Free Cash Flow closing atN81.8billion.

Its Q2 Profit After Tax grew by 3.2percent; H1 Profit After Tax was down by 5.2percent due to higher tax expense after expiry of the Pioneer Status Incentive (PSI). Lafarge Africa continued its focus on driving sustainability-led growth, health and safety.

Lolu Alade-Akinyemi, CEO, Lafarge Africa Plc commented: “I would like to thank all employees and stakeholders of Lafarge Africa for another quarter of strong results, despite the challenging economic environment. We remain focused on delivering sustainable value to all stakeholders as the market recovers for the rest of the year”.

“We achieved strong top-line growth of 10.3percent in Q2 and 5.9percent in H1; Operating Profit growth of 13.3percent in Q2 and 7.7percent in H1, and Profit Before Tax improvement of 29percent in Q2 and 18percent in H1. Owing to the expiration of the Pioneer Status Incentive, Q2 Profit After Tax growth was a muted 3.2percent. This is backed up by a strong Free Cash Flow position and healthy Balance Sheet. The recent launch of our Eco label cement brand re-affirms our commitment to delivering superior value to our customers.

“This new product has been certified to be eco-friendly with 30percent lower carbon emission than the local industrial standard.

Our strategic and cost management initiatives have contributed to improved results despite the challenges. We remain steadfast in our commitment to driving innovation and accelerating green growth in line with our sustainability ambitions and targets,” said Lafarge Africa CEO.

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Business Updates

On June 26, 2023, Lafarge Africa announced the launch of Eco Label cement brand. Eco Label represents a broad range of green cement for high performance, sustainability and circular construction. This initiative supports the Lafarge Africa’s ambition to accelerate green construction with the use of eco-friendly products.

The products that are certified to be eco-friendly have a lower 30percent carbon footprint compared to the local industry standard (Global Concrete & Cement Association). Lafarge UniCem brand which contributes about 23percent of the company’s entire volume is now eco-friendly.

By the production of this eco-friendly cement, Lafarge’s end-users have the opportunity to make greener choices and accelerate the country’s carbon reduction journey in the manufacturing sector.

Cement Bag Manufacturing Plant: Lafarge Africa continues to adopt global best practices in its manufacturing processes with the commissioning of a state-of-the-art cement bag manufacturing plant at its Ewekoro Plant in May this year.
Reputed to be the first of its kind in the country, and with a monthly production capacity of 8.8 million bags and an annual capacity of 105 million bags, the new bag plant allows Lafarge to reinforce availability and handle large scale production of bags while also improving livelihood through direct employment of 254 individuals, with 60percent being residents of Ewekoro Community.

Outlook

“The Nigerian Infrastructure and Construction Sector is expected to continue to grow despite inflationary pressure on purchasing power. As a result, we maintain our positive outlook, with market recovery expected for the second half of the year. We will continue to maximize volume opportunities across our markets and actively manage our costs. The company remains committed to its sustainability ambitions and strategy of ‘Accelerating Green Growth’ through innovative building solutions and delivery of stakeholder value,” Lafarge Africa said.