• Monday, February 26, 2024
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Lafarge Africa’s operating profit rises 23% to N69.4bn

Lafarge Africa’s operating profit rises 23% to N69.4bn

Lafarge Africa has recorded 23 percent growth in operating profit to N69.35 billion in 9M’2023 from N56.56 billion in the same period of 2022.

The firm’s operating margin increased by 300 basis points to 24 percent from 21 percent during the period reviewed.

“The fundamentals of the business remain strong. We achieved strong top-line growth of 9.8 percent and 7.1 percent in Q3 and 9M, respectively. 9M operating profit grew 22.6 percent. Our Q3 performance was however impacted by macro-economic challenges mostly inflation and Naira devaluation,” Lolu Alade-Akinyemi, CEO of Lafarge Africa said in a statement.

Lafarge Africa’s cash and cash equivalents increased to N154.64 billion in 9M’2023 from N80.7 billion in the same period of 2022.

Movement in cash and cash equivalents reveals that net cash flow generated from operating activities increased to N93.47 billion from N49.59 billion.

Net cash flow used in investing activities stood at a negative of N19.41 billion from a negative of N11.2 billion while net cash flow used in financing activities stood at a negative of N34.8 billion from N6.4 billion.

Read also: Lafarge Africa grows nine months PBT by 13.4%

“We continue to maintain a strong free cash flow position and a healthy balance sheet, positioning us for sustainable growth. Our mid to long-term outlook remains positive. We are committed to delivering sustainable value to all stakeholders as we go into the last quarter of the year,” Alade-Akinyemi said.

Lafarge Africa’s finance income surged to N3.37 billion from N433.95 million while finance costs increased to N11.57 billion from N3.04 billion.

The firm’s revenue increased to N289.08 billion from N269.85 billion while input cost grew to N141.02 billion from N135.08 billion.

Lafarge Africa’s profit after tax grew to N39.3 billion in 9M’2023 from N44.9 billion in the same period of 2022.

Administrative expenses increased to N18.41 billion in 9M’2023 from N15.89 billion in the similar period of 2022.

The firm’s other income grew to N540.71 million in 9M’2023 from N281.44 million in the same period of 2022.

Impairment reversal charge on receivables amounted to N8.91 million from N43.65 million during the period.

Read also: Lafarge Africa operating profit rises by 13.32% in Q2

Lafarge Africa’s business update

Lafarge Africa launched its pilot electric-powered truck in its cement operations on October 23, 2023.

According to the firm, this project is in line with Lafarge Africa’s commitment to innovation and sustainability in its operations and is also aligned with its Accelerating Green Mobility strategy.

“Also, we have injected additional gas trucks into the fleet as we continue to adopt eco-friendly and low-carbon means of distribution for our products. Lafarge Africa will continue to scale up these innovative initiatives over time in line with our decarbonisation strategy and growth ambitions.”

“The introduction of the Electric Vehicles (EV) marks a significant shift towards a cleaner, more efficient and sustainable supply chain; this strategic move benefits not only the environment but also holds immense promise for all stakeholders,” Lolu Alade-Akinyemi, the company’s GMD/CEO, explained at the launch of the trucks.

The GMD said their journey towards a more sustainable future began years ago with a vision to integrate environmentally friendly practices into every aspect of their operations, noting that these had guided them through a series of significant milestones that had reshaped the landscape of their supply chain.”

Osaze Aghatise, the company’s logistics director, said that the introduction of the electric trucks signified an important achievement in their logistics strategy, signalling their transition to more eco-friendly and sustainable transportation practices.

“We aim to incorporate more EV into our fleet shortly alongside our exploration of other sustainable transportation initiatives. This exemplifies our unwavering dedication to playing a leadership role within our industry, fostering the development of a competitive and sustainable supply chain,” he said.

Read also: Rising income tax shrinks Lafarge Africa’s Q1 profit by 15%

Lafarge Africa’s 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 continued market recovery expected for the last quarter of the year,” it said.

“We will continue to maximise volume opportunities across our markets and actively manage our costs,” Lafarge Africa said in a note, adding that the company remains committed to its sustainability ambitions and strategy of ‘Accelerating Green Growth’ through innovative building solutions and delivery of stakeholder value.