Lafarge Africa Plc has released its financial results for the year ending December 31, 2024, reporting a pre-tax profit of N152.2 billion, a significant 93.27% increase compared to the N78.7 billion recorded in 2023.
This performance comes despite escalating production costs, rising taxation, and economic uncertainties that have affected Nigeria’s business environment.
The company’s revenue surged by 71.83%, reaching N696.7 billion, compared to N405.5 billion in the previous year. Cement sales contributed 97% of total revenue, highlighting Lafarge’s dominance in Nigeria’s construction sector. Additionally, total assets grew by 45.37% to N990.5 billion, reinforcing the company’s financial strength.
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This report comes at a time when the Nigerian government is urging cement manufacturers to lower cement prices to N7,000 per bag, citing better FX rates. However, manufacturers, including Lafarge and its competitors, have pushed back against these calls, citing an unfriendly business climate, rising production costs, and heavy taxation as reasons for the persistently high price of cement.
The Nigerian cement industry has remained a key driver of economic growth and infrastructure development, contributing significantly to GDP and employment. However, the sector has struggled under the weight of rising input costs, energy expenses, and multiple taxes imposed by the government.
The government’s recent appeal to cement manufacturers to bring down prices to N7,000 per bag has sparked debate. While authorities argue that lower prices will ease the burden on citizens and stimulate construction activity, cement manufacturers insist that the current economic environment does not support such price reductions.
Aliko Dangote, chairman of Dangote Cement, a key rival of Lafarge Africa, recently detailed the tax burden faced by cement manufacturers, stating that for every N1 generated in revenue, 52 kobo is paid in taxes to the government. He highlighted the following taxes affecting the industry:
- 30% corporate tax
- 7.5% value-added tax (VAT)
- 2% education tax
- 1% health tax
- 10% withholding tax on dividends paid to shareholders
According to Dangote, these taxes, coupled with soaring energy costs and foreign exchange volatility, have significantly eroded profit margins, making it difficult for companies to lower cement prices without financial losses.
Financial Performance Breakdown
Lafarge Africa’s revenue of N696.7 billion in 2024 represents its highest earnings on record, reflecting the company’s ability to expand market share and sustain demand for its products. However, the cost of sales surged by 76.09%, reaching N350 billion, driven by higher costs for fuel, power, and raw materials.
Fuel and power expenses alone amounted to N158.7 billion, while raw materials and consumables cost the company N73.4 billion. These rising expenses have forced Lafarge to adjust pricing strategies to maintain profitability, further justifying the company’s reluctance to implement government-mandated price cuts.
Despite higher costs, gross profit increased by 67.72% to N346.7 billion, compared to N206.7 billion in 2023. However, operational expenses also saw a sharp rise.
Selling and distribution expenses climbed to N120.4 billion, marking a 54.28% year-over-year increase, largely due to higher transportation and logistics costs. Administrative expenses also rose to N40.1 billion, up from N27.5 billion the previous year, mainly driven by technical service fees and staff-related expenses.
Lafarge recorded a substantial increase in other income, which surged by 706.05% to N7.1 billion, compared to N891.7 million in 2023. This growth was largely attributed to the reversal of an impairment charge on property, plant, and equipment valued at N4.6 billion, along with a government grant of N1 billion.
However, finance income declined by 55.70%, falling from N4.6 billion in 2023 to N2 billion in 2024, reflecting lower returns on cash reserves. At the same time, finance costs surged by 63.76% to N42.5 billion, driven by higher interest rates and debt servicing costs.
Nonetheless, pre-tax profit soared by 93.27% to N152.2 billion, demonstrating Lafarge Africa’s ability to maintain profitability despite economic hurdles.
Strong Asset Growth and Financial Position
Lafarge Africa’s total assets increased to N990.5 billion, a 45.37% rise from the N681.3 billion reported in 2023. Non-current assets climbed to N576.5 billion, reflecting investments in property, plant, and equipment, while current assets grew to N414 billion, up from N239 billion in the prior year.
Within its asset portfolio, cash and cash equivalents stood at N237.8 billion, providing the company with a strong liquidity position. Inventory levels also rose significantly, with spare parts accounting for N52.5 billion and finished goods valued at N25 billion.
Lafarge Africa’s retained earnings increased by 28.29% to N315.5 billion, reflecting its commitment to long-term financial stability and reinvestment in operations.
Lolu Alade-Akinyemi, CEO of Lafarge Africa, expressed confidence in the company’s financial performance and strategic direction, emphasizing the company’s ability to navigate a challenging business environment while delivering record-breaking revenue and profits.
“I am excited to report our record-breaking revenue of N697 billion and PAT of N100 billion for the full year 2024, a testament to our strong market positioning, operational efficiency, cost management, and dedication to value creation.
“Despite a challenging business environment, we have remained resilient, leveraging innovation and green growth in line with our sustainability ambitions, while also delivering value to our stakeholders,” he said.
Dividend Declaration
As part of its commitment to rewarding investors, Lafarge Africa declared a final dividend of 120 kobo per unit of 50 kobo ordinary shares, subject to shareholders’ approval and tax deductions. The dividend will be payable to shareholders whose names appear in the Register of Members as of March 28, 2025.
This dividend declaration reflects Lafarge’s financial strength and its ability to maintain investor confidence despite broader economic pressures.