The half year (H1) results of Nigeria’s cement makers show they are recovering from pandemic-induced downturn that hitherto muted their earnings in first half of 2020.
For instance, Dangote Cement plc, the largest listed company on the nation’s Exchange, posted record profit growth of 52 percent as demand for building material picked up with the easing of COVID-19 restrictions, according to its half-year result at the Nigerian Exchange Limited.
The cement company grew profit by 52 percent to N191.6 billion in the first half of 2021 compared with N126.1 billion in the same time last year. That is the highest in at least eight years, according to data collated by BusinessDay.
Dangote Cement revenue rose 44.8 percent, also to a record N690.5 billion from N476.8 billion last year, the biggest jump since at least 2012.
BUA Cement plc, the second largest cement maker, grew revenue by 22.7 percent to N124.27 billion from N101.26 billion in H1’20. Profit before tax (PBT) increased by 26.9 percent to N49.70 billion from H1’20 low of N39.16 billion.
BUA Cement profit after tax (PAT) in H1’21 increased by 24.6 percent to N43.396 billion from N34.819 billion in same period of 2020. The share price increased on Friday by 70kobo or 1.04 percent to N67.3.
Also, Lafarge Africa plc came stronger in half-year 2021 compared with same period in 2020. It reported revenue of N145.01 billion, up 20.3 percent from N120.54 billion in H1’20.
Lafarge Africa’s profit before tax grew by 27.8 percent to N36.74 billion from N28.75 billion in H1’20, while its PAT in the review half year of 2021 came in higher by 21.4 percent to N28.32 billion, from N23.32 billion in H1’20.
Lafarge expects good demand momentum in second half (H2) of 2021, saying it will continue to maximise volume opportunities across its markets and actively manage its costs.
“We will consolidate our efforts in sustainability,” Lafarge said.
Khaled el-Dokani, CEO of Lafarge Africa, said, “Our performance remained resilient in Q2 2021, with net sales of +29.4percent, recurring EBIT of +11.1percent and net income of +25.7percent, compared to previous year. We are equally pleased with the progress we are making on sustainability; our use of affordable clean energy and our agro-ecology footprint are in accordance with the acceleration of our net zero pledge.”
Lafarge Africa share price decreased by 8.3 percent on Friday to N22.9.
Dangote Cement production and bagging capacity rose 6.5 percent to 48.5 metric tons in the first half of the year compared with 45.4 metric tons in the same period last year.
Production cost of sales rose 36.4 percent to N202.4 billion compared with N276.1 billion in the periods under review. As a result of the impressive sales, gross profit rose 51 percent to N414.1 billion from N274.4 billion in the first half of 2020.
The cement maker was also able to reduce its borrowing cost by 8.5 percent to N9.4 billion in the first half of 2021 compared with N10.2 billion in the same time last year. Dangote Cement’s stock closed 0.04 percent higher at N248.10, Friday.
“The COVID-19 induced lockdown halted building projects and affected the demand for cement in the first half of 2020, but as restrictions were lifted all the cement demand build-up that were not able to materialise during the lockdown poured in,” Mustapha Wahab, an infrastructure analyst at Chapel Hill Denham, said.
Earnings per share (EPS) grew 50.4 percent to N11.21 per share from N7.45 per share in June 2020.