By Goddy Egene
A cost efficient strategy boosted the profitability of Lafarge Africa Plc despite the margin rise in revenue for the half year ended June 30, 2020. The unaudited results showed a revenue of N120.54 billion in 2020, up 2.3 per cent from N117.885 billion in the corresponding period of 2019.
Selling and marketing expenses were reduced by 9.9 per cent from N1.720 billion to N1.550 billion, while administrative expenses declined by 30.6 per cent to print at N7.830 billion, compared with N11.289 billion in 2019.
Net financing cost dipped by 67.3 per cent to N4.052 billion, from N12.395 billion in 2019. Following the significant reduction in financing cost, Lafarge Africa Plc ended the half year with a profit before tax of N28.757 billion, showing an increase of 86.1 per cent. Profit after tax grew faster by 89.2 per cent from N9.0 billion to N23.329 billion.
The performance was expected given the efforts made by Lafarge Africa Plc to restructure its balance since last year. The cement manufacturing firm sold its subsidiary in South Africa Plc and also injected equity funding through a rights issue, actions that led to a return to profitability and payment of 100 kobo dividend for 2019 financial year.
The company recently assured shareholders of improved performance and higher returns on investments having significantly strengthened its balance sheet.
Addressing shareholders at the company’s 61st annual general meeting(AGM), the immediate past chairman, Mr. Omobolaji Balogun, said Lafarge Africa was now in a vantage position to face the future despite the current challenges brought on by the global pandemic- COVID-19.
“The underlining strength of the company’s turnaround and cost-reduction strategy in full year 2019 and the divestment of the South African business have placed Lafarge on more solid financial footing even as the company continues to create more opportunities in the Nigerian market on the basis of its global capabilities in product innovation,” he said.
Also speaking, the Chief Executive Officer of Lafarge Africa, Khaled El Dokani, commended the shareholders for their continued confidence in the company.
“Our shareholders have been supportive over the years and we look forward to more robust years in our collective commitment to improving lives as we implement initiatives that will keep us on a growth trajectory. We are very positive about Lafarge and its future,’’ he said.
Meanwhile, the stock market closed on a negative note as the Nigerian Stock Exchange (NSE) All-Share Index shed 0.54 per cent to close at 24,650.16.