Building materials’ giant- Lafarge Africa, on Tuesday presented its half-year unaudited financials, showing flat revenue growth, while cost of sales grew rose double digits, just like selling and marketing and administrative expenses. The situation made worse by the three-digit growth in finance costs for the half-year period.
After all of these, the company reported a loss before and after tax, after a three-digit decline over the period.
Sales revenue for the period rose 4.81% to N162.291bn from N154.839bn. A breakdown of the sales revenue for the half-year period showed that sale of cement yielded N132.216bn, up from N124.313bn; while aggregate and concrete dropped slightly to N27.744bn, up from N28.019bn; while admixtures and other products dropped to N2.331bn from N2.506bn.
Cost of sales climbed to N123.329bn from N110.39bn, representing a 11.72% climb; the bulk of this was the N76.219bn variable cost, up from N70.398bn (mainly the N29.024bn distribution variable costs, up from N26.393bn and the N24.438bn spent on raw materials and consumables, up from N21.289bn). Added to the production cost which fell to N12.25bn from N15.474bn; and others, gross profit dropped by 12.35% from N44.449bn in prior half-year to N38.961bn.
Selling and marketing expenses rose 27.19% up from N2.177bn to N2.769bn; just as administrative expenses increased to N19.956bn from N16.016bn; just as other income fell 96.32% to N106.638m from N2.899bn. This was driven by the N2.371bn gains on disposal of property, plant and equipment in 2017Q2 (Elephant Cement House Building in Alausa, Ikeja to the Lagos State Government for N3.1bn). Other operating expenses dropped from N15.277bn to N5.542bn, following which operating profit fell to N16.336bn from N29.139bn; while finance income climbed to N1.033bn from N553.271m. Finance costs soared by 105.65% to N23.715bn from N11.532bn, after interest on borrowings jumped from N8.94bn to N16.041bn .
Loss before tax came to N6.345bn, compared to the prior half-year’s N18.16bn; while loss after tax stood at N3.902bn, after the N2.443bn tax credit, compared to the profit after tax of N19.732bn that followed a previous tax credit of N1.571bn. The loss per share therefore stood at 22 kobo, compared to the earnings of N2.76 each.
A further review of the report showed that at the end of the second quarter (April-June stand-alone), Lafarge Africa reported a net profit of N14.571bn, after the tax credit of N5.856bn.