Lafarge Africa Reports N15.262bn Profit Following Sale of South African Subsidiary
Lafarge Africa Plc on Friday said it grew profit after tax by 160 percent in the second quarter of the year to take its first half of the year profit to N23.329 billion.
In the unaudited financial statement released through the Nigerian Stock Exchange, the company said profit after tax rose from N5.864 billion recorded in the second quarter of 2019 to N15.262 billion in the second quarter of 2020.
The company’s revenue stood at N56.845 billion in the period under review, below the N59.869 billion reported in the same period of 2019. This was largely due to the recent decision by the company to let go its subsidiaries and focus on profit-making business units.
Lafarge Africa sold its South African subsidiary for US$316.3 million in 2019.
The company cost of sales also reduced from N38 billion in the corresponding quarter of 2019 to N32.762 billion in Q2 2020.
The N5.24 billion difference in cost of sale boosted gross profit by N2.21 billion from N21.868 billion posted in the same period of 2019 to N24.083 billion.
Similarly, administrative expenses reduced from N6.040 billion spent in Q2 2019 to N3.238 billion in Q2 2020. While operating profit jumped by N4.842 billion from N16.326 billion recorded in the second quarter (Q2) of 2019 to N21.168 billion.
Also, the report shows Lafarge was able to reduce not just administrative expenses by selling its South Africa subsidiary but reduced finance costs. The company’s finance costs moderated substantially from N6.209 billion in Q2 2019 to N1.940 billion in Q2 2020.
Therefore, profit before tax from continuing operations expanded from N10.866 billion in Q2 2019 to N19.375 billion in Q2 2020.
Despite paying N4.113 billion as income tax in the quarter under review, up from N1.328 billion paid in the same quarter of 2019, the company was able to post N15.262 billion profit after tax.
Speaking on the impressive performance, Khaled El Dokani, CEO of Lafarge Africa said “Q2 results remained resilient with net sales of -5.1% and recurring EBIT +29.7%, compared to prior-year period, despite the impact of the COVID-19 pandemic. The implementation of our “HEALTH, COST and CASH (HCC)” initiatives have delivered considerable improvement in our performance.”
