LAFARGE AFRICA PLC H1'22 - Still poised for long term growth
| Lafarge Africa PLC recently released its unaudited H1’22 results, reporting an impressive bottom-line growth of 32% y/y to ₦37.4 billion, supported by strong and rising cement demand and reduced finance costs. | |||||
| Higher input costs constrain margins Lafarge recorded double-digit revenue growth for the sixth consecutive quarter, with a significant jump of 31% y/y in topline for the Q2’22 period, consolidating Revenue for the H1’22 period at ₦186.5 billion. The positive topline performance was supported by the ongoing infrastructure investments by the current administration and real estate activities from the private sector. |
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| Efficient cost containment to support margins Although cement demand may face a slight setback due to continuous rainfall in Q3, we expect FG’s infrastructure investments to bolster demand for the rest of the year. Additionally, FX-linked costs may strain profitability, given recent currency depreciations, as these would drive input costs higher and further constrain margins. Nonetheless, we expect cement players like Lafarge to continue to tame the effect of the FX crisis, through locally sourced energy sources. |
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