Lafarge Africa grows profit by 3.4% in Q3 2020

Lafarge Africa Plc, a leading Sub-Saharan Africa building Materials Company saw its profit after-tax rise by 3.4 percent to N4.86 billion in Q3 2020 from N4.7 a year ago as revenue rose.

The cement company saw revenue rise by 31.4 percent to N59 billion in Q3 2020 from N45 billion in the same period last year, and N56 billion in the previous quarter.

Recurring earnings before interest and taxes (EBIT) was also up 7.2 percent to N8.3 billion in Q3’2020 from N7.7 billion in Q2’2019.

For 9 months ended 30th September 2020, Lafarge Africa recorded a 10.3 percent growth in revenue to N180 billion from N163 billion recorded in the same period last year.

Read also: Lafarge Africa says donated over N500million towards fight against Covid-19

Lafarge Africa has also seen its share price rise to N17.90 as the market closed on Friday from N15.30, its opening price at the beginning of 2020.

“Our robust results for the first 9 months reflect the strong recovery of the demand in Q3 and the successful implementation of our Health, Cost & Cash initiatives,” said Khaled El Dokani, Country CEO of Lafarge Africa plc.

“Both have delivered considerable improvement in recurring EBIT, net income and free cash flow, despite the impact of the COVID-19 pandemic and Naira devaluation, particularly in Q3”

“We continue to prioritise the health and safety of our employees, while supporting our partners and communities”.

Lafarge Africa introduced the Health, Cost and Cash cutback initiative earlier this year. This involves cutting back on CAPEX, fixed costs, and focusing on the health and safety of staff and its customers in other to bolster its cash position.

During this period, the gross profit rose to NGN13.80 billion, surpassing the NGN12.14 billion it recorded in Q3 2019.

Although the cost of sales rose to N45.5 billion in Q3 2020, from N33 billion recorded in Q3 2019, revenue remained unaffected.

Lafarge Africa’s Profit before tax for Q3 2020 rose to N5.5 billion from N4.6 billion posted in the third quarter of the corresponding period of 2019.

However, Profit for the period dip by 95 percent to N4.8 billion in Q3 2020 from N111 billion in the same period last year. Although this decline was a result of the N106 billion recorded as profit from discontinued operation in 2019.

Administrative expenses also rose 32 percent to N4.5 billion for Q3 2020 period from N3.4 billion a year ago.

Finance income rose by 82 percent to N190 million during the period from N344 million in the same period last year.

Earnings per share of Lafarge Africa stood at N30 in the period under review compared to N29 last year.

On its balance sheet, total assets increased by 4 percent to N510 billion as at September 2020 from N490 billion a year ago while total liabilities rose to N153 billion from N140 billion in September 2019.

Outlook for Q4

Lafarge Africa says it expects the implementation of the “Health, Cost & Cash” initiatives to continue to deliver improvement in our performance.

The company also expects market demand to remain strong in Q4. However, Naira devaluation and inflation remain a concern for the cement maker in Q4.

Despite this, the company says it will maintain a healthy balance sheet in Q4.