Lafarge Africa revenue increased by 8.6% in 2023 as the revenue increased to N405.50 billion in 2023 from N373.25 billion in 2022. Concrete sales went up and other products sew additional growth, the breakdown of its earnings sources showed.
However the cost of sales adjusted for depreciation increases by 12.6% year on year. the rate of increase of cost of sales is higher than rate of increase of revenue. the cost of sales increased from N153.43 billion in 2022 to N172.82 billion in 2023.
The surge was driven by higher direct costs due to the impact of the persistent devaluation of the currency on the cost of imported raw materials, elevated inflationary pressures, and rising energy costs.
As a result of increase in rate of cost of sales, the devaluation of the naira, the post tax profit dipped by 4.7 percent to N51.14billion . Also the company recorded a higher effective tax rate last year following the expiry of the pioneer status incentive in 2022.
Commenting on the results, the Chief Executive Officer of Lafarge Africa, Lolu Alade-Akinyemi, said, “The fundamentals of our business remain strong. In spite of extremely challenging macroeconomic headwinds, we grew the top line by 8.6 per cent and improved the operating margin from 22.6 per cent to 25.3 per cent in FY 2023.
“In the face of very material FX devaluation losses and higher effective tax rate, profit after tax declined YoY by 4.7 per cent. Our performance was largely impacted by spiralling inflation and unprecedented naira devaluation, with the attendant pressure on energy and supply chain costs.
“Despite these challenges, we continue to maintain a strong free cash flow position and a strong balance sheet, positioning us for sustainable growth over the medium to long term. We are committed to delivering sustainable value to all stakeholders in the coming years, as we have done historically. I would like to thank all employees and stakeholders of Lafarge Africa for their commitment over the years.”
The company maintained a positive outlook for the year 2024, saying, “The Nigerian infrastructure and construction sector is expected to continue growing despite inflationary pressure and currency depreciation affecting the economy. As a result, we maintain our positive outlook, expecting increased demand in 2024 as the economy picks up.
“We will continue to maximise volume opportunities across our markets and actively manage our costs. The company remains committed to its sustainability ambitions and strategy of ‘Accelerating Green Growth’ through innovative building solutions and delivering stakeholder value.”
The Board of Directors of Lafarge Africa has proposed a dividend of N1.90 per unit of its shares for the year ended December 2023 amounting to N30.60bn. This was lower than the N32.22bn dividend it paid in the previous year.
In a corporate notice filed with the Nigerian Exchange Limited on Thursday, the proposed dividend will first have to be approved by shareholders at the next Annual General Meeting of the company.
“A final dividend of 190 kobo per unit of 50 Kobo ordinary share, payable from the Pioneer Reserve, will be paid to shareholders whose names are in the register of members as at the close of business on Thursday, 28th March 2024,” part of the notice stated.