Lafarge Africa Plc, on thursday released its unaunaudited first quarter result for the period ended march 31, 2025, reporting a remarkable 836.7% surge in earnings per share to N3.02 as against N0.32 that was recorded in 2024.
Just as the board of directors has proposed an interim dividend of N4.00 per share, translating to 5.1% dividend yield based on the closing price of N79.20 kobo as at the close of trading on 24 April.
With this Larfage has carried forward the momentum from its fourth quarter result of 2024, delivering a strong recovery from the foreign exchange induced losses that weighed on it 2024 first quarter earnings.
The impressive result was driven by an 80.3% increase in revenue, which was underpinned strong growth across all business segments cement aggregates & concrete, and mortar and power.
Management attributed the revenue growth to improved production capacity and strong market reception of new product offerings.
Looling at the result, market analyst believes this performance also reflects sustained demand from both public and private sector construction activity, further complemented by modest price adjustments.
They noted that the N4.00 interim dividend came unexpected and serves as compensation for the modest N1.20 dividend declared for 2024 financial year.
Market watchers pointed out that they expect the company’s strong earnings trajectory to continue through 2025, underpinned by robust demand from construction and real estate sectors, and growing traction from new product lines, including the Ground Calcium Carbonate (GCC) introduced.
However, despite robust revenue growth, gross margin rose only slightly by 6bps y/y to 52.6%, as the cost of sales grew by 80.0%. Notably, the increase in cost of sales was primarily driven by significant pressure from variable production costs, which consist of fuel, power, raw materials, and consumables costs.
The growth in these cost elements highlights the persistent impact of elevated energy prices and input cost pressures across the business.
Meanwhile, EBITDA margin expanded by 504bps to 32.0% during the period, despite a 46.3% increase in operating expenses.
The rise in OPEX was primarily driven by a 40.3% increase in distribution costs, reflecting diesel and energy expenses. Nonetheless, the OPEX-to-sales ratio improved by 483bps to 20.8%, indicating improved operational efficiency.
At the same time, WAPCO reported a net finance income of N1.45 billion against a net finance cost of N21.53 billion in 2024, reflective of higher finance income and foreign exchange gain of N1.08 billion as against foreign exchange loss of N21.80 billion in 2024.
The company also recorded a 14.0% increase in finance costs driven by a 425.3% increase in interest expenses to N1.19 billion.
Profit before tax rose sharply by 739.5% to N73.11 billion, while profit after tax increased by 836.7% to N48.64 billion, after accounting for a tax expense of N24.47 billion.
