Cement producer Lafarge has reported a five per cent year-on-year rise in 2012 first quarter sales to US$4.4 billion as higher prices offset rising costs and demand from emerging markets increased
Operating income was up 28 per cent for the first three months of the year to $345.8 million, driven by higher activity in Africa, the Middle East, Asia and Latin America.
In the African and Middle East region, operating income in the first quarter of 2012 was $408 million, up by $53.1 million compared to 2011 figures - an increase of 15 per cent.
Lafarge Cement’s local Nigerian arm also enjoyed a successful year posting better-than-expected results for the first quarter ended March 31, 2012.
Lafarge Cement WAPCO Nigeria posted a turnover of NGN 22.614 billion (US$143.3 million) in Q1 of 2012, up from NGN 14.198 billion (US$90.1 million) in the corresponding period of 2011, with profit after tax soaring by 151 per cent from NGN 1.621 billion (US$10.3 million) to NGN 4.071 billion (US$25.8 million) in 2012.
FBN Capital analysts said that sales growth of 59 per cent year-on-year for the firm was thanks to a ramp-up of new capacity at its new Lakatabu plant in Nigeria beginning full operations in December 2011.
“We suspect that the company has stepped up its sales efforts, branching out from its core market in the south-west region to other parts of the country including the north, Niger-Delta and south east,” said FBN Capital in a statement.
“This new plant has helped to keep Nigeria self-sufficient in cement. It will create the foundations for future economic development in our country.
“It will employ, and provide skills for hundreds of Nigerians and it will benefit hundreds more indirectly,” the analysts added.
Globally, Lafarge has also been engaged in a cost reduction programme, which it said resulted in savings of $90.6 million in the first quarter of 2012 and is on track to reach at least $518.1 million for the year.
“We successfully launched our new cost reduction programme and it is positive that price actions are taking hold to address cost inflation,” said Lafarge SA group chairman Bruno Lafont.
The company forecast that the global cement market would grow by between 1 per cent and 4 per cent year-on-year in 2012, with emerging markets remaining the main driver of demand.
Lafont also noted that Nigeria would remain an important market for the company.
“We remain fully committed to this country, working in partnership with our customers in providing high quality and innovative products that will add value to their business,” he remarked.
“Throughout the long history of our operations our products have helped shape the Nigerian landscape and will continue to do so for many years to come.”
