Despite a 36.15% rise in sales revenue for the year ended December 31, 2017, directors of building materials maker- Lafarge Africa Plc, on Monday proposed a dividend of N13.01bn, up from N5.754bn, from a loss after tax for the period of N34.601bn. The dividend translated to N1.50 per share, same as that of the 2016 financial year.
The proposed dividend is subject to approval by shareholders at the annual general meeting in Lagos on May 16 to those whose names are on the register of members as of the qualification date on April 27, while the register closes from April 23 to 27, 2018.
According to the result, Lafarge Africa recorded sales revenue growth of N79.439bn from N219.714bn in the corresponding full year of 2016 to N299.153bn. Of this amount, the Nigerian business segment yielded N204.484bn, while N94.668bn came from South Africa.
Cost of sales jumped by N69.341bn or 38.72% to N179.05bn from prior year’s N248.393bn; following which gross profit for the period stood at N50.759bn as against N40.661bn in 2016.
Selling and marketing expenses for the period rose slightly to N3.685bn from N3.355bn; while administrative expenses jumped N17.857bn or 76.68% from N23.737bn to N41.594bn. The bulk of this was N10.536bn spent on wages and salaries, which went up from N6.064bn, followed by N8.807b for office and general expenses, from N5.105bn; and N9.774bn that went into technical services fees, up from N7.551bn.
The technical service agreement fee was paid to Lafarge S.A. France, relating to Industrial Franchise registered with the National Office for Technology Acquisition and Promotion (NOTAP) in Nigeria, which is computed as 3.5% of sales, among others.
Other income soared to N4.069bn, up from just N916.239m, with N3.956bn arising from Nigeria and N113.051m from South Africa. This was boosted by gain on disposal of Lafarge Nigeria property, plant and equipment worth N2.373bn (being gain on disposal its Alausa, Ikeja, Lagos-based Elephant Cement House which it had occupied for two decades). In the prior year, N1.045bn was earned from disposal of property, plant and equipment; just as scrapped and other miscellaneous income equally soared to N1.533bn from N243.101m.
Other operating expenses dropped to N1.663bn, with N1.009bn from the South African segment; compared to N2.045bn in 2016. Operating profit from the Nigerian segment stood at N30.155bn. This was hindered by the N22.27bn from S’Africa, leaving total group operating profit fell to N7.885bn, down by N4.554bn or 36.87% from N12.439bn.
A breakdown of the year’s revenue by product lines showed that cement remained the biggest contributor with N238.779bn, as against the N176.285bn in 2016; followed by the N57.701bn from aggregates and concrete from N41.783bn.
Cost of sales from cement rose to N188.297bn, while others stood at N60.096bn; with other income of N3.956bn from cement and N113.051m. Other expenses comprising selling and marketing expenses, administrative expenses and other operating expenses came to N40.983bn from cement and N5.96bn from others; as a result of which operating income from cement was left at N10.512bn, while ‘others’ yielded a loss of N2.626bn.
Finance income dropped to N1.438bn from N3.675bn, with interest income on current accounts rising to N1.324bn from N244.063m, just as interest on loan receivable fell from N3.029bn to N113.233m. Finance costs climbed to N43.216bn from N38.921bn, with interest on borrowings jumping to N22.067bn from N14.192bn, just as interest on bank overdraft rose to N6.642bn from N870.865m. The group’s loss before tax grew by N11.213bn or 50.89% from N34.032bn from N22.818bn.
Income tax expense stood at N281.46m, as against a tax credit of N39.988bn; resulting to loss after tax of N34.601bn, compared to a net profit N16.898bn.
Exchange difference on translation of foreign operations stood at N18.545bn, a significant rise from the previous N1.494bn; even as exchange differences on translation of foreign joint ventures increased to N50.712m from N1.534m; bringing other comprehensive income to N18.596bn, as against N1.496bn, a year earlier.
Total comprehensive loss for the year therefore stood at N15.782bn, as against the profit of N18.553bn, translating to loss per share of N6.37, compared to N3.15 earnings.