…The building solutions company also reported an EPS of N3.17 (2022FY: N3.33).
…The decline in the company’s EPS is attributable to the higher net FX losses (+84.0% y/y) and tax payments (+83.6% y/y) for the year
THUR, FEB 29 2024-theGBJournal| Lafarge Africa Plc released its 2023FY audited financials today, reporting profit after tax (PAT) decline of 4.7% y/y to N51.14 billion in 2023FY.
Notably, profit before tax (PBT) increased by 15.7% y/y to N80.69 billion in 2023FY.
However, due to the expiration of the group’s pioneer status incentive in 2022FY, tax expense for the review period surged by 83.6% y/y to N29.55 billion, a combination of which impacted profit after tax.
The building solutions company also reported an EPS of N3.17 (2022FY: N3.33). The decline in the company’s EPS is attributable to the higher net FX losses (+84.0% y/y) and tax payments (+83.6% y/y) for the year, majorly due to its expired pioneer tax incentive.
Lafarge Africa Plc board has proposed a final dividend of N1.90/s, translating to a dividend yield of 5.9% based on the closing price of N31.95/s (29 February).
Meanwhile, revenue grew by 8.6% y/y in 2023FY (2022FY: +27.3% y/y), reflective of the broad economic headwinds that slowed sales within the year and shutdown of the Mfamosing plant (which accounts for c.50.0% of production volume) for maintenance in Q3-23.
Across its product segments, Lafarge saw improvement in sale of cement (+8.5% y/y | 96.8% share of revenue) and readymix and other product (+14.6% y/y | 3.2% share of revenue).
Although management is yet to provide details on the breakdown, we posit that revenue was buoyed by upward adjustment of cement prices which as of 9M-23 was hiked by 23.0% y/y.
Gross margin weakened by 150bps to 57.4% in 2023FY, as the cost of sales ex-depreciation grew by 12.6% y/y, owing to higher cost of fuel and power (+21.6% y/y), production (+20.4% y/y) and maintenance (+21.8% y/y).
The cost pressure was driven by the high inflationary environment and naira depreciation effect on the company’s FX-linked gas contracts.
Notwithstanding, EBITDA margin strengthened by 259bps to 32.0% y/y in 2023FY (2022FY: 29.4%) supported by a moderation in selling and distribution costs (-12.9% y/y) amid increased administrative expenses (+25.1% y/y) during the period.
Consequently, the OPEX/sales ratio declined by 400bps to 26.0% in 2023FY (2022FY: 30.0%).
Following the devaluation of the naira in 2023, net finance cost spiked by 47.6% y/y as the group recorded net FX losses of N21.04 billion (+84.0% y/y) amid a 73.0% y/y rise in interest expenses, majorly from bank charges and other interest costs.
Elsewhere, we highlight that the group’s finance income grew by 213.0% y/y.
X-@theGBJournal|Facebook-the Government and Business Journal|email:gbj@govbusinessjournal.com|govandbusinessj@gmail.com
