Lafarge revenue declines 6.3%

Lafarge revenue declines 6.3%
Published: 29 August 2013
Lafarge cement demand for the first 7 months of 2013 was constrained by limited construction activity, MD Jonathan Shoniwa said yesterday.

Construction projects have not taken off as anticipated; consequently, market demand remains weak predominantly driven by individual home building.

There are a number of construction projects in the pipeline which should boost demand should they materialise.

Giving a trading update in the wake of Lafarge interims to June 30, Shoniwa indicated that domestic cement sales volume for the first 7 months at 188kt was 10% lower than same period last year due to the uncertainty in the operating environment.

Consequently, revenue at $37.8 million was 8% lower than last year while profit excluding re-organisation costs closed at $6.0 million was 5% better than same period last year.

"Operating profit margin to sales ratio (excluding re-organization costs) improved from 12.8% for last year to 15.9%.

"Further improvement is expected during the second half of the year due to improved production efficiencies following the successful completion of the plant maintenance exercise and economies of scale and cost reduction initiatives which the company embarked on last year," he said.

Turning to the outlook, Shoniwa pointed out that traditionally cement demand is better in the second half of the year compared to the first half and this trend is expected to continue this year.

He added that $2.3 million will be spent on plant sustaining capital expenditure during the second half of the year and this is expected to improve plant efficiencies.

"Cash generation is also expected to improve in line with improved operating margins and working capital management," he noted. 
- businessdaily
Tags: Lafarge,

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