The board of building materials giant, Lafarge Africa Plc, last week urged shareholders to look forward to its sustaining its 2022 first quarter growth momentum till year-end and beyond.
Highlight of the performance for the first three months of the year showed that net profit soared by 92.2% on a 26.8% revenue growth, following which Earnings Per Share jumped from 57 kobo to N1.09, which when annualized holds a promise of N4.36 from which investors could pay a considerably better dividend than the N2 per share it paid at the end of last full-year.
Khaled El Dokani, Chief Executive of Lafarge Africa, believes such is doable, based on the Q1 2022 performance that shows significant improvement over Q1 2021, and coming after a very strong Full-Year 2021 score-card.
Expressing pleasure at the numbers and the progress made in the area of sustainability, he said the Q1 2022 performance “confirms the continued growth trajectory of our business.
“Our use of affordable clean energy and agro-ecology footprint are in accordance with our net zero pledge journey,” El Dokani stressed, noting the hope that the good demand momentum would continue in Q2, with the company continuing to maximize volume opportunities across its markets, while also actively managing costs.
According to the result posted on the Nigerian Exchange Limited portal, revenue from sales stood at N90.605bn, up from N71.47bn; while cost of sales (production) was constrained at N48.432bn, as against the N40.271bn reported in the preceding Q1 of 2021. Cost was driven by production variable costs which rose from N24.443bn to N31.383bn; while fixed product costs rose marginally to N6.49bn from N6.29bn; and maintenance fixed costs from N2.779bn to N4.222bn; while depreciation dropped slightly from N6.759bn to N6.336bn. This resulted in gross profit growth from N31.198bn to N42.173bn.
Selling and distribution costs increased from N12.855bn to N15.022bn, lifted by the N12.609bn distribution variable cost, from N11.469bn; administrative expenses also inched to N5.232bn from N4.315bn, as sales and other staff-related costs rose from N1.755bn to N1.921bb, as technical service fees jumped from just N573.47m to N1.411bn. According to an explanatory note, technical fee for 2021Q1 was actually N1.062bn, before it was reduced by a write-back of N489.399m.
Other income increased to N165.661m from N147.969m, helped mainly by the N139.717m government grant, which increased from N70.333m; while impairment reversal on receivables fell sharply from N527.822m to N32.689m; resulting in an operating profit of N22.116bn, up from N14.703bn.
Finance income fell to N26.192m (interest income from short-term fixed deposits and current accounts) from N171.703m; and finance costs from N2.104bn to N675.734m, the bulk of which was the interest on borrowings of N388.86m, dropping from N1.665bn; bringing profit before tax to N21.467bn, compared to the previous N12.771bn. Income tax expenses of N3.909bn, up from N3.635bn, driven by the deferred income tax expense of N2.61bn, compared to the previous N2.877bn, resulted in a net profit of N17.558bn, compared to N9.136bn in the corresponding period of 2021.