Lafarge Africa defies exchange rate headwinds, post 29% growth in profits

Lafarge Africa reported its 2023 second-quarter results showing pre-tax profits grew by 29.02% year on year, reaching N32.787 billion.

This took the half-year pre-tax profits to N55.315 billion versus N46.879 billion in the same period last year.

Key highlights Q2 2023 vs Q2 2022

Revenue N105.860 billion +10.29% YoY

Cost of sales N48.943 billion +16.38% YoY

Gross Profit N56.917 billion +5.5% YoY

Administrative expenses N5.490 billion +12.49% YoY

Selling and Distribution expenses N21.609 billion -4.51% YoY

Operating profit N30.046 billion+13.32% YoY

Finance Income N3.152 billion +2,201.32% YoY

Finance cost N411 million -66.82% YoY

Profit for the year N20.497 billion +3.25% YoY

Earnings per share N1.27 +3.25% YoY

Cash and cash equivalent N179.243 billion +51.39%.

Total Assets N654.695 billion +8.99%


Insights: The growth in pre-tax profit was primarily fueled by the growth in finance income and a decline in finance costs.

The company recorded N1.912 billion in net foreign exchange gain and N1.239 billion in interest income from short-term fixed deposits and current account in the second quarter (Q2), contributing significantly to the 2,201.32% year-on-year (YoY) growth in finance income.

Additionally, the finance costs, which declined due to the decline in interest on borrowing and the absence of foreign exchange loss, also contributed. There was a 67% YoY decline in interest on borrowing and the absence of foreign exchange loss compared to N694 million recorded the previous year.