Lafarge Nigeria’s HI profit up 29%

Nigeria’s 725 Lafarge Cement Wapco reports profit before tax of N17.74 billion (approximately US$109 million) for its half-year ended 30 June, a 29% increase from its N13.8 billion ($85 million) in the corresponding period of the previous year.

The company, which last month merged with South Africa’s Lafarge subsidiary, also enjoyed a 12% increase in revenue for the first six months of 2014. Revenue rose to N55.35 billion ($341 million) from N49.48 billion ($305 million) in the preceding year.

The company said it achieved growth in sales despite low demand for cement caused by the rainy season which slowed construction activities, as well as Nigeria’s delay in the passage of its 2014 budget.

However, it is reported that analysts say they expect to see further improvement in cement companies’ unit sales in the second half of the year given the capacity ramp-up and strong cement demand.

The chairman of Lafarge Wapco, Olusegun Osunkeye, is said to have disclosed last month that the 60%  French-owned Nigerian subsidiary would pay the Lafarge group $200 million in cash and $1.4 billion in new shares to buy Lafarge’s wholly-owned South African unit and other of its Nigerian businesses in order to combine them under a new name Lafarge Africa.

The consolidation is seen by analysts as a threat to the dominance of Africa’s largest cement giant Dangote cement.

French Lafarge owns 60% of Lafarge Wapco, 100% of the Atlas Cement Company and 58.6% of Ashaka Cement (both Nigerian listed companies). It also jointly owns United Cement Company of Nigeria with Swiss-based Holcim, and all of the Lafarge South African business.