…Net Sales: FY 2024 up 72% YoY benefiting from improved volume; Q4 2024 up 86% vs PY
…Operating Profit: FY 2024 up 89% YoY; Q4 2024 up 103% vs PY
…Operating Margin: FY 2024 28%, up from 25% PY; Q4 2024 31%, up from 28% PY
FRI FEB 28 2025-theGBJournal| Lafarge Africa Plc CEO, Lolu Alade-Akinyemi describes the company’s FY 2024 earnings performance as a ”testament to our strong market positioning, operational efficiency, cost management and dedication to value creation.” following a stronger-than-expected strong revenue growth.
The cement maker’s revenue surged by 71.8% y/y in 2024FY (Q4-24: +86.2% y/y) supported by strong growth in the cement (+72.6% y/y; 97.2% of total revenue) and aggregates (+45.1% y/y; 2.6% of revenue) segments.
It equally reported a 95.8% y/y increase in EPS to N6.22 (2023FY: N3.17)
Although management has yet to provide a detailed revenue breakdown, we attribute this strong performance to a c.45.0% y/y increase in cement prices, alongside higher sales volumes.
Despite strong revenue growth, gross margin contracted by 370bps y/y to 53.7% (Q4-24: -5bps to 55.6%) due to an 86.8% y/y increase in cost of sales (ex-depreciation). This was largely driven by a surge in energy costs (+109.8% y/y | 49.2% of COGS) and raw material costs (+59.5% y/y | 22.8% of COGS).
The elevated cost profile reflects the impact of higher energy prices (+43.4% y/y), naira depreciation (-41.0% y/y), and inflationary pressures, which collectively weighed on gross margins.
Meanwhile, EBITDA margin edged up by 3bps y/y to 31.9% in 2024FY (Q4-24: +28bps y/y to 34.2%) despite a 51.6% y/y increase in operating expenses (ex-depreciation).
The rise in OPEX was primarily driven by a 54.9% y/y increase in distribution costs (70.8% of total OPEX), reflecting higher diesel, and freight expenses.
Consequently, the OPEX-to-sales ratio declined by 300bps to 22.7% (2023: 25.7%), reflecting operational efficiency gains.
Further down, net finance costs rose sharply by 89.8% y/y in 2024FY (Q4-24: -58.6% y/y), driven by a 270.1% y/y increase in finance costs and a 15.3% y/y rise in net FX losses, while finance income declined 55.7% y/y.
The surge in finance costs was primarily due to higher interest expenses on borrowings (+191.5% y/y) and a 290.3% y/y increase in bank charges, largely attributed to letters of credit fees.
Additionally, FX losses amounted to NGN24.27 billion, reflecting the 41.0% depreciation of the naira, with the bulk of these losses (NGN19.91 billion) incurred in H2-24.
Overall, profit before tax (PBT) surged by 89.0% y/y to N152.52 billion, while profit after tax (PAT) rose by 95.8% y/y to N100.15 billion, following a tax expense of N57.37 billion.
The company is maintaining its positive outlook for 2025, with market recovery expected to continue in its growth trajectory, and against the backdrop of Nigerian Infrastructure and Construction Sector growth expectations, despite inflationary pressure on purchasing power.
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