Lafarge Africa Plc, a leading Sub-Saharan Africa building Materials Company has recorded a 65 percent jump in profit in 2021, helped by growth in cement sales.
The cement maker saw its profit after tax surge to N51 billion in the full-year period of 2021 compared to N30.8 trillion in 2020.
Revenue rose to N293.1 billion in 2021, up 27.1 percent from N230.5 billion in 2020.
Lafarge shares have gained 13.7 percent year to date. The shares are down 7.31 percent to N24.10 per share, Wednesday.
According to analysts at FBNQuest, cement companies like Lafarge were able to increase their pricing throughout 2021 on the back of rising inflation and this supported their sales and volume growth.
According to the International Cement Review, retail cement prices in Nigeria reportedly rose from around N2400-2600/50kg bag in 2020 to N3500 at the end of April 2021 and sold for around N4000 towards the end of the year.
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However, cost of sales rose 23.6% to N150.5 billion compared to N121.7 billion in the periods under review. Despite the rising cost, the firm’s gross profit was up 31 percent to N142.5 billion, helped by the increased sales.
The company’s gross margin, which shows the amount it retained per N100 revenue earned after deducting direct cost, rose to N49 in 2021 compared to N47 the previous year.
Net profit margin also rose to 17 percent in 2021 compared to 13 percent the previous year. Profit margin is the ratio of profit remaining from sales after all expenses have been paid.
The company’s borrowing cost plunged 45.7 percent to N5.27 billion in 2021 compared to N9.71 billion in 2020.
Finance income was N1.74 billion in 2021 compared to 2020 when it made N1.17 billion.
The cement maker saw it’s selling and distribution expenses jump 24.2 percent to N56.9 billion in 2021 compared to N45.8 billion in 2020.
Administrative expenses also rose 15.3 percent to N21.1 billion compared to N18.3 billion in the periods under review.
The company’s income tax expense grew 69.8 percent to N10.7 billion in the full year period of 2021 compared to N6.3 billion in 2020.
Profit before tax stood at N62.2 billion in the full year 2021 compared to N37.5 billion in the previous year.
Lafarge made an impairment loss of N25.6 million on trade receivables compared to the previous year when it recorded a gain of N20.6 million.
Earnings per share jumped 65 percent to N317 per share in the 2021 period from N191 per share in 2020.
Net cash flow from operating activities grew to N72.7 billion in 2021, 15.6 percent higher than 63.7 billion in 2020.
The company made a loss of N17.8 billion on its net cash flow from investing activities compared to a loss of N8.8 billion in 2020.
The cement maker saw its net cash flow from financing activities surge 115 percent to N61.2 billion in 2021 compared to N28.4 billion in the full-year period of 202o.
