Lafarge Africa Plc, a leading cement manufacturer, experienced substantial financial growth in 2024, culminating in a remarkable 96% surge in profit after tax, reaching N100.1 billion compared to N51.1 billion in 2023. This impressive performance underscores the company’s resilience and strategic adaptability amidst the prevailing macroeconomic headwinds. The surge in profitability was primarily fueled by a significant 72% increase in revenue, amounting to N696.8 billion, up from N405.5 billion in the preceding year. This revenue growth can be attributed to a combination of higher sales volumes and the implementation of effective pricing strategies, effectively leveraging market dynamics to maximize returns. Lafarge Africa’s strong financial results demonstrate its ability to navigate challenging economic conditions while capitalizing on market opportunities.
A deeper look into the company’s financial performance reveals that the growth was broad-based, with a 68% increase in gross profit, reaching N346.7 billion compared to N206.7 billion in 2023. This improvement in gross profit highlights the company’s focus on operational efficiency and cost management throughout its production processes. Despite facing increased selling and distribution costs, which rose by 54% to N120.4 billion, and a rise in administrative expenses to N40.1 billion from N27.6 billion, Lafarge Africa maintained a healthy operating profit margin. The company’s operating profit surged by 89% to N193 billion, up from N102 billion in 2023, demonstrating its ability to control costs and optimize resource allocation.
Despite a 64% increase in finance costs, attributed to higher interest rates and borrowing costs, which amounted to N42.5 billion, Lafarge Africa’s pre-tax profit still saw a significant 93% jump to N152.3 billion compared to N78.8 billion in the previous year. While income tax expenses also rose by 89% to N52.1 billion, this did not impede the company’s overall profitability. The robust growth in profit before tax, coupled with effective management of other expenses, contributed significantly to the impressive surge in profit after tax. This strong financial performance underscores the company’s strategic focus on balancing growth with prudent financial management.
Lafarge Africa’s balance sheet further reflects its robust financial health. Total assets expanded by 45% to N990.5 billion in 2024 from N681.4 billion in 2023, driven by investments in property, plant, and equipment, which increased to N409.8 billion from N360.2 billion. This expansion in non-current assets signifies the company’s commitment to enhancing its production capacity and infrastructure to meet growing market demands. Furthermore, Lafarge Africa’s cash and cash equivalents saw a significant improvement, reaching N237.9 billion from N168.4 billion in the previous year. This substantial increase in cash reserves not only strengthens the company’s liquidity position but also provides a solid foundation for future growth initiatives and strategic investments.
On the liabilities side, the company experienced a rise in total liabilities to N485.9 billion in 2024 from N246.3 billion in 2023. This increase was primarily due to higher trade payables and contract liabilities, reflecting the company’s increased business activities and expanding operations. The growth in liabilities is aligned with the company’s overall expansion and increased revenue generation. The higher liabilities are counterbalanced by the significant growth in assets, indicating a healthy financial position. The company’s strong liquidity position, evidenced by the substantial cash reserves, provides further assurance of its ability to manage its financial obligations effectively.
The overall strong financial performance of Lafarge Africa translated into increased returns for shareholders, with earnings per share rising to 622 kobo from 317 kobo in 2023. The company’s consistent growth trajectory throughout 2024, as evidenced by its nine-month results showing a 46% profit increase to N57.3 billion, further solidifies its position as a leading player in the cement industry. This consistent performance reinforces investor confidence and demonstrates the company’s ability to deliver sustainable value creation for its shareholders. The company’s strategic focus on operational efficiency, pricing strategies, and capacity expansion has positioned it well for continued growth and market leadership.
