Giant cement manufacturer, Lafarge Africa has released Q1 2018 results, showing surprising negative output, making it the third consecutive quarter of dismal performance by the company.
Lafarge’s Q1 2018 results showed that the company reported pre-tax and post-tax losses of –N2.9bn and –N2.0bn respectively.
The weak earnings were driven by a combination of factors including a significant gross margin contraction of 338bp y/y to 22.3%, a 41% y/y rise in opex and a 133% y/y spike in net interest expense. Sales came in flat y/y but grew 7% q/q.
The pre-tax and after tax losses compare with pre-tax and after-tax losses of – N35.1bn and –N29.4bn that the company reported in Q4 2017. Compared with our forecasts, sales were in line with our N81.2bn forecast.
However, PBT and PAT missed our forecasts because of negative surprises in gross margin, interest expense and opex.
