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By Chukwuma Umeorah
Despite a challenging macroeconomic environment marked by exchange rate volatility and policy uncertainty, Dangote Cement, BUA Cement and Lafarge Africa Plc have reported a combined revenue of N1.37 trillion for the first half (H1) of 2023.
According to the unaudited H1 2023 financial results of these top cement manufacturers in Nigeria, the sector’s revenue grew by N190 billion to reach N1.37 trillion, representing a 16.1 per cent increase from the N1.18 trillion recorded in the same period last year.
The cumulative profit after tax (PAT) for these companies stood at N277.69 billion, up 2.5 per cent from N270.88 billion in 2022. Daily Sun analysis of the data reveals that Dangote Cement accounted for 69.4 per cent of the combined revenue, with N950.83 billion in H1 2023, showing a 17.7 per cent increase from the N808.04 billion earned in the previous year’s corresponding period.
This growth underscores the company’s ability to navigate market dynamics and capitalize on emerging opportunities, showcasing its resilience and strategic prowess. However, due to a 20.8 per cent increase in fuel and power consumption costs, reaching N157.02 billion, among other production and operating expenses, its profit before tax (PBT) declined to N239.863 billion from N264.890 billion.
Nevertheless, its net profit marginally increased to N178.603 billion from N178.72 billion recorded in H1 2022. The group’s cost of sales also rose by 18.8 per cent, amounting to N383.088 billion in H1 2023 from N322.461 billion in the same period under review.
A closer look at BUA Cement’s financials reveals that its PAT increased by 3.7 per cent from N61.36 billion to N63.62 billion, while its PBT rose to N76.42 billion from N74.38 billion recorded in H1 2022. Lafarge Africa Plc posted a revenue of N197. 68 billion in H1 2023 as against N186. 59 billion in H1 2022 up by 5.94 per cent.
However, there was a decline in its profit margin, reporting a PAT of N35.49 billion in the first half of 2023, down from N37.41 billion in the same period of review in 2022, indicating a 5.15 per cent decrease. This was largely impacted by increased income tax expenses, rising from N9.47 billion to N19.84 billion.
Despite challenges in the business environment, these cement companies have demonstrated strategic foresight and an ability to weather economic fluctuations, especially challenges that came with the devaluation of the naira and other audacious policies from the new administration of President Bola Tinubu consistently achieving profitability. The industry has also contributed to the development of infrastructure, housing, and industrialization in the country and they have expressed their commitment to continue investing in innovation, quality, and sustainability to meet the growing demand for cement in Nigeria and beyond.
Commenting on the results, the Group Managing Director of Dangote Cement Plc, Arvind Pathak, stated that the company’s operations achieved a 22.6 per cent recovery in sales over the first quarter, which was impacted by the general elections and the cash crunch.
He revealed that the steep currency devaluation in mid-June slowed this volume recovery and increased already inflated operating costs. Pathak said, “We navigated the tough terrain thanks to our strong operational framework and rigorous focus on cost management. Our Group revenue was up by 17.7 per cent to N950.8 billion.’’
He added that the company’s strategic growth priorities were hinged on its vision of transforming Africa and building a sustainable future.
Describing its H1 2023 results as strong and positive performance, the Chief Executive Officer, Lafarge Africa Plc, Lolu Alade-Akinyemi, said the company’s strategic and cost management initiatives contributed to improved results despite the challenges of the macro-economy.
He said, “We achieved strong top-line growth of 10.3 per cent in Q2 and 5.9 per cent in H1; Operating Profit growth of 13.3 per cent in Q2 and 7.7 per cent in H1, and Profit Before Tax improvement of 29 per cent in Q2 and 18 per cent in H1. Owing to the expiration of the Pioneer Status Incentive, Q2 Profit After Tax growth was a muted 3.2 per cent.”
This is backed up by a strong Free Cash Flow position and healthy Balance Sheet. The recent launch of our Eco label cement brand re-affirms our commitment to delivering superior value to our customers.
We remain focused on delivering sustainable value to all stakeholders as the market recovers for the rest of the year”.
