‘Inflation, naira devaluation’: Lafarge records 4.7% loss in 2023

Lafarge Africa Plc says its Profit After Tax (PAT) for the 2023 financial year declined by 4.7 per cent.

The Chief Executive Officer of Lafarge Africa, Lolu Alade-Akinyemi, disclosed this in a notification to the Nigerian Exchange Limited (NGX) in Lagos on Thursday, February 29, 2024.

Alade-Akinyemi stated that the company’s profit dropped from N53.647 billion recorded in 2022 to N51,141 billion in 2023.

He explained that the higher effective tax rate in 2023 after the expiry of the Pioneer Status Incentive in 2022, coupled with pressures from foreign exchange losses, led to the downward performance.

The Lafarge boss stated that the firm’s performance was largely impacted by spiralling inflation and unprecedented naira devaluation, with the attendant pressure on energy and supply chain costs.

Alade-Akinyemi said: “In the face of very material FX devaluation losses and higher effective tax rate, our PAT declined year-on-year by 4.7 per cent.

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“Despite these challenges, we continue to maintain a strong free cash flow position and a strong balance sheet, positioning us for sustainable growth over the medium to long term.

“We are committed to delivering sustainable value to all stakeholders in the coming years, as we have done historically.”

He added that the company, however, maintained a strong balance sheet position for the year under review with a free cash flow of N109.7 billion and net cash of N142 billion.

The Lafarge CEO noted that the firm’s Profit Before Tax (PBT) increased by 15.7 per cent year-on-year despite N21 billion foreign exchange losses in 2023.

Alade-Akinyemi said the fundamentals of the company’s business remain strong, adding that despite extremely challenging macroeconomic headwinds, Lafarge grew its top line by 8.6 per cent.

He said the company also improved its operating margin from 22.6 per cent to 25.3 per cent in the 2023 financial year.

Alade-Akinyemi thanked all the employees and stakeholders of Lafarge Africa for their commitment over the years.

The Star