Lafarge Raked In NGN 1.8 Billion Loss For 2015


Lafarge Africa PLC [WAPCO:NL], a smaller competitor to Dangote Cement PLC, has just released its full year 2015 result showing the company made a net loss of NGN 1.8 billion.

The company through the result it released to the Nigerian Stock Exchange showed that the cement maker’s gross revenue fell from NGN 74 billion in 2014 to NGN 52 billion.

The company’s huge cost of sales totaling about NGN 44 billion eroded its profit base even before taxation is factored into the result. As an indication that the company is hugely leveraged, its finance charges was NGN 2.5 billion in 2015 and similar to what it paid for loans in 2014 which is about NGN 2.5 billion.

Lafarge is owing its creditors about NGN 90 billion compared to its NGN 27 billion cash positions. Its net asset NGN 178 billion compared to NGN 176 billion  in 2014.

Lafarge is coming under pressure from its bigger competitor Dangote Cement. The company was aggressive in 2015 with various moves to compete in areas it can match Dangote cement. The company has also launched B2B products such as its ready mix targeting the huge real estate boom and prime property developments in Lagos and key parts of Nigeria.

However, the challenging micro-economic environment coupled with Dangote’s bullish move to get a maximum market share is a major risk to Lafarge’s profitability.

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