WorldStage Newsonline– Lafarge Africa Plc (WAPCO) has released its second quarter 2024 (Q2-24) unaudited results with pre-tax profit increasing by 15.7% y/y to N37.92 billion from N32.79 billion in Q2-23 while profit after tax advanced by 17.9% y/y to N24.16 billion from N20.50 billion in Q2-23.
WAPCO’s revenue grew by 49.1% y/y in the quarter thanks to improved sales volume and price increases.
A breakdown of revenue by product shows growth across all segments – cement (+49.9% y/y), aggregates (+21.9% y/y), and other products (+82.9% y/y).
H1-24 revenue increased by 49.5% y/y (cement +49.6% y/y | aggregates +47.3% y/y | other products +79.6% y/y).
However, gross margins declined by 372bps y/y to 56.0% (H1-24: -462bps y/y to 54.4%) due to a 62.9% y/y rise in the cost of sales (ex-depreciation).
The combined costs of fuel, power, raw materials, and consumables surged by 64.5% y/y in Q2-24, representing 73.0% of the total cost of sales. This was primarily influenced by exchange rate fluctuations due to the depreciation of the naira and the high cost of diesel.
OPEX (ex-depreciation) increased by 28.6% y/y, largely due to inflationary pressures further impacting EBITDA margin, which declined by 8bps y/y to 34.5% (H1-24: -203bps y/y to 31.3%).
While there were no FX losses in Q2-24, the company reported a net finance cost of NGN9.78 billion compared to the net finance income of NGN2.74 billion in Q2-23 as a result of the high-interest rate environment which drove finance costs to N12.13 billion from N0.41 billion in Q2-23, offsetting the NGN2.35 billion finance income reported. Specifically, interest paid on borrowings (+34.6% y/y) and bank charges (+65.3x y/y) contributed to the rise in finance costs during the period.
For H1-24, net finance costs totalled NGN32.28 billion, compared to NGN3.03 billion in H1-23.
Meanwhile, the company reported an earning per share (EPS) growth of 17.9% y/y to N1.50from N1.27 in Q2-23.
The growth was driven by a 49.1% y/y increase in revenue. However, for H1-24, EPS declined by 17.3% y/y to N1.82 from N2.20 in H1-23, influenced by the substantial FX loss reported in Q1-24.
